Exhibit 10.2
Sears Hometown and Outlet Stores, Inc.
Stock Units Agreement
August 15, 2017
This is a Stock
Units Agreement between Sears Hometown and Outlet Stores, Inc. (the “Company”) and the individual who has executed this Stock Units Agreement following the words “Xxxxx Xxxxxx’x Signature” (the
“Xxxxx Xxxxxx”). The term “this Agreement” means collectively this Stock Units Agreement and each Grant Supplement (defined in section 1 of this Agreement) relating to this Agreement.
Preliminary Statement
This Agreement is
made pursuant to the Company’s Amended and Restated 2012 Stock Plan, as amended from time to time (the “Plan”). Capitalized terms used but not defined in this Agreement are defined in the Plan.
Terms and Conditions
The Company and the
Xxxxx Xxxxxx agree as follows:
1. Stock Unit Grants. This Agreement is a “Stock Agreement” referred to in Section 2.20 of the
Plan. For each of the Company’s Stock Unit grants to the Xxxxx Xxxxxx pursuant to the Plan, each of this Agreement, the Plan, and each Grant Supplement to this Agreement (which Supplement need not be signed by the Xxxxx Xxxxxx), will govern
unless the Stock Unit grant is subject to a separate stock units agreement between the Company and the Xxxxx Xxxxxx (a “Separate Agreement”). The Company’s Stock Unit grants to the Xxxxx Xxxxxx pursuant to the Plan,
excluding those that are subject to a Separate Agreement, are together referred to in this Agreement as the “Stock Units.” The Company will evidence each grant of Stock Units to the Xxxxx Xxxxxx by an agreement entitled
“Supplement to Stock Units Agreement” to be attached to this Agreement from time to time (each a “Grant Supplement” and together the “Grant Supplements”). Grant Supplements will indicate the
number of Stock Units granted to the Xxxxx Xxxxxx and the restrictions, forfeiture conditions, and other terms that are applicable to the Stock Units granted. This Agreement governs all Stock Units granted to the Xxxxx Xxxxxx on or after the date of
this Agreement. All Grant Supplements, whenever delivered to the Xxxxx Xxxxxx, are incorporated into and form a part of this Agreement.
2. Restrictions; Forfeiture Conditions. Each grant of Stock Units is subject to each of the
restrictions and each of the forfeiture conditions described in this Agreement and in the Grant Supplement applicable to the grant until they have been satisfied or have otherwise expired or been terminated. Failure to satisfy the forfeiture
conditions by the times specified on the Grant Supplement will result in the forfeiture of the number of unvested Stock Units specified on the Grant Supplement. Unvested Stock Units may not be sold, transferred, exchanged, assigned, pledged,
hypothecated, or otherwise encumbered. If the Xxxxx Xxxxxx’x employment with the Company or its subsidiary terminates for any reason other than as provided in section 3 of this Agreement, then the Xxxxx Xxxxxx will forfeit all of the Xxxxx
Xxxxxx’x right, title, and interest in and to the then-unvested Stock Units as of the date of employment termination, and the unvested Stock Units will revert to the Company immediately following the event of forfeiture. The Xxxxx Xxxxxx will
forfeit all unvested Stock Units if (a) in the opinion of the Committee, the Xxxxx Xxxxxx, without the written consent of the Company, engages directly or indirectly in any manner or capacity as principal, agent, partner, officer, director,
employee, or otherwise, in any business or activity competitive with the business conducted by the Company or any of its subsidiaries or (b) the Xxxxx Xxxxxx performs any act or engages in any activity or conduct that in the opinion of the
Chief Executive Officer of the Company or the Committee is inimical to the best interests of the Company. The restrictions and forfeiture conditions imposed by this section 2 will apply to all cash and other consideration received by the Xxxxx
Xxxxxx with respect to the Stock Units in connection with mergers, reorganizations, consolidations, recapitalizations, stock dividends, and other changes in corporate structure affecting the common stock of the Company.
1
3. Expiration and Termination of Restrictions and Forfeiture Conditions. The restrictions and
forfeiture conditions imposed by this Agreement on each grant of Stock Units, or portion of the grant specified in the applicable Grant Supplement, will expire on the earliest to occur of the following:
(a) upon the passage of time or upon the achievement of performance goals or upon both the passage of time and the achievement of performance goals, together
with such other conditions, all as provided in the Grant Supplement for the grant;
(b) on the date of termination of the Xxxxx Xxxxxx’x employment
with the Company or one of its subsidiaries by reason of disability (as determined by the Company) or death, but (i) if the grant includes performance goals then only to the extent the Committee determines that the goals have been satisfied as
of the date of termination and (ii) if the grant includes one or more passage-of-time forfeiture conditions all of them that expire in accordance with the terms of the Grant Supplement will be deemed to have expired on the day immediately
preceding the date of termination;
(c) on the date the Company terminates the Xxxxx Xxxxxx’x employment with the Company or one of its subsidiaries
without Cause (as defined in the Executive Severance Agreement between the Company and the Xxxxx Xxxxxx dated August 15, 2017 (the “Severance Agreement”); and
(d) on the date the Xxxxx Xxxxxx terminates the Xxxxx Xxxxxx’x employment with the Company or one of its subsidiaries for Good Reason (as defined in the
Severance Agreement).
4. Limitations on Rights. The Stock Units are bookkeeping entries only. In accordance with, and subject to, this
Agreement and the Grant Supplements the Company only will make cash payments with respect to the Stock Units, as to which the Xxxxx Xxxxxx will have no rights to receive Stock or other securities of the Company, no rights as a stockholder of the
Company, no dividend rights, and no voting rights.
5. Timing and Manner of Cash Payment. As soon as practicable, and in no event more than
twenty days, after the date all, or portion specified in the applicable Grant Supplement or Grant Supplements, of the Stock Units vest in accordance with this Agreement and the Grant Supplement or Grant Supplements, the Company will make to the
Xxxxx Xxxxxx the lump sum cash payment to be made in satisfaction of the Stock Units, or specified portion, in accordance with, and subject to, this Agreement and the Grant Supplement or Grant Supplements. The Xxxxx Xxxxxx and the Xxxxx
Xxxxxx’x successors, heirs, assigns, and personal representatives will have no continuing rights or interests in the Stock Units that have been paid by the Company in accordance with this section 5.
6. Adjustments. Section 12 of the Plan is applicable to this Agreement and the Stock
Units.
7. No Right of Continued Employment. Nothing in this Agreement will (a) interfere with or limit in any way the right of
the Company or any of the Company’s subsidiaries to terminate the Xxxxx Xxxxxx’x employment at any time or (b) confer upon the Xxxxx Xxxxxx any right to continue in the employ of the Company or any of the Company’s subsidiaries.
8. Payment of Taxes.
Whenever the law
requires the Company to withhold federal, state, or local taxes of any kind (including the Xxxxx Xxxxxx’x FICA obligation) on behalf of the Xxxxx Xxxxxx, the Xxxxx Xxxxxx will pay the required withholding amount to the Company no later than the
date due, or to make other arrangements satisfactory to the Company regarding payment of the withholding amount. The obligations of the Company under this Agreement will be conditional on the Xxxxx Xxxxxx’x compliance with these withholding
payment requirements. The Company and its affiliates will, to the extent permitted by law, have the right to deduct the withholding amount from any payment of any kind otherwise due from the Company or its subsidiary to the Xxxxx Xxxxxx, including
without limitation any payment referred to in section 5 of this Agreement.
9. Grants Subject to Clawback. All cash and other consideration received
by the Xxxxx Xxxxxx with respect to the Stock Units are subject to forfeiture, recovery by the Company, and each other action pursuant to clawback or recoupment policies that the Company may adopt from time to time, including without limitation
policies that the Company may be required to adopt under the Xxxx-Xxxxx Xxxx Street Reform and Consumer Protection Act and implementing rules and regulations thereunder or as otherwise required by law.
10. Amendment. This Agreement may not be modified, amended, or waived in any manner except in writing signed by the Company and the Xxxxx Xxxxxx.
The waiver by the Company or the Xxxxx Xxxxxx of compliance with any term of this Agreement will not operate or be construed as a waiver of any other term of this Agreement or any subsequent breach of a term of this Agreement.
2
11. The Plan Controls. The terms of the Plan are incorporated into and made a part of this
Agreement. This Agreement will be governed by and construed in accordance with the Plan. If any actual or alleged conflict among (a) the terms of the Plan, the terms of this Agreement, and the terms of the Grant Supplement, or (b) between
the terms of the Plan and the terms of this Agreement or the terms of any Grant Supplement, the terms of the Plan will be controlling and determinative.
12. Successors. This Agreement will be binding upon all successors of the Company in accordance with the terms of this Agreement and the Plan.
13. Severability. If any one or more of the provisions contained in this Agreement are invalid, illegal or unenforceable, the other
provisions of this Agreement will be construed and enforced as if the invalid, illegal, or unenforceable provision had not been included.
14.
Notice. Notices and communications under this Agreement must be in writing and delivered personally, by overnight courier, or by registered or certified United States mail, return receipt requested, postage prepaid. Notices to the Company
must be addressed to:
Human Resources Department
Sears Hometown and Outlet Stores, Inc.
0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx Xxxxxxx, Xxxxxxxx 00000
Attn: Vice President, Human Resources
or any
other address designated by the Company in a written notice to the Xxxxx Xxxxxx. Notices to the Xxxxx Xxxxxx will be directed to the address of the Xxxxx Xxxxxx then currently on file with the Company, or at any other address given by the Xxxxx
Xxxxxx in a written notice to the Company.
15. Administration. The authority to manage and control the operation and administration of this
Agreement will be vested in the Committee. The Committee will have all powers with respect to this Agreement that it has with respect to the Plan. All interpretations of this Agreement and the Plan by the Committee and all decisions made by it with
respect to this Agreement are final and binding on the Xxxxx Xxxxxx and all other persons.
16. Governing Law. Illinois law, other than its conflict of laws principles, will govern
interpretation, performance, and enforcement of this Agreement.
|
|
|
| Sears Hometown and Outlet Stores, Inc. |
|
|
|
| Xxxxxx Xxxxx |
| Vice President, Human Resources |
Xxxxx Xxxxxx’x Name: X. X. Xxxx
Xxxxx Xxxxxx’x Signature: /s/ X. X. XXXX
3
Sears Hometown and Outlet Stores, Inc.
Supplement to Stock Units Agreement
Supplement Date: August 15, 2017
Name of Xxxxx
Xxxxxx: X. X. Xxxx
Xxxxx Date: August 15, 2017
Number of Stock Units: 40,000
Dear Xxxxx Xxxxxx:
I am pleased to inform you that Sears Hometown and Outlet Stores, (the “Company”) has granted to you the number of
Stock Units indicated above (the “Stock Units”). The Stock Units are granted to you pursuant, and subject, to the terms of (1) the Sears Hometown and Outlet Stores, Inc. Amended and Restated 2012 Stock Plan (the
“Plan”), (2) the Stock Units Agreement between the Company and you (the “Stock Units Agreement”), and (3) this Supplement to Stock Units Agreement. This Supplement to Stock Units Agreement is
a “Grant Supplement” referred to in the Stock Units Agreement.
Unless the restrictions and forfeiture conditions expire earlier
in accordance with section 3 of the Stock Units Agreement and subject to the sentences below following the table, the restrictions and forfeiture conditions imposed by the Stock Units Agreement will expire with respect to the Stock Units, and the
Stock Units will vest, on a three-installment basis in accordance with the following table. For each Stock Unit that vests, the Company will make a cash payment to you equal to the “Close/Last” price of the Company’s common stock,
$0.01 par value, on the Nasdaq Stock Market (or substitute or successor stock exchange) on the applicable Vesting Date.
|
|
|
| Percentage of Stock Units Vesting for each
“Installment” |
|
Dates of Expiration of Restrictions and Forfeiture
Conditions for each Installment (each a “Vesting Date”) |
| 33.3% |
|
January 30, 2018 |
| 33.3% |
|
January 30, 2019 |
| 33.4% |
|
January 30, 2020 |
If your employment with the Company terminates as described in section 3(b), (c), or (d) of the Stock Units Agreement on
a date that is prior to the next Vesting Date (the “Final Vesting Date”), two events will occur. First, the percentage of Stock Units indicated above that will vest as a result of the termination of your employment will be
limited to the percentage of Stock Units that would have vested on the Final Vesting Date but for the termination of your employment. Second, and assuming your employment termination date is prior to January 30, 2019, you will forfeit all of
your right, title, and interest in and to all Stock Units that in accordance with the above table would vest after the Final Vesting Date, and these unvested Stock Units will revert to the Company immediately following your employment termination.
Here’s an example, which is subject to the terms of the Stock Units Agreement. As described above in the table, 13,320 of your Stock Units would vest on January 30, 2018, 13,320 would vest on January 30, 2019, and 13,360 would vest on
January 30, 2020. Assume also that your employment with the Company terminates as described in section 3(b), (c), or (d) of the Stock Units Agreement on January 15, 2019. As a result, (a) 13,320 of your Stock Units would have
vested on January 30, 2018 (and you would have received at that time the cash proceeds from the Company, which you would keep), (b) the 13,320 Stock Units that are
4
scheduled to vest on January 30, 2019 (which becomes the Final Vesting Date) instead would vest on January 15, 2019 (and you would keep the cash proceeds received from the Company), and
(c) you would forfeit completely the 13,360 Stock Units scheduled to vest on January 30, 2020 and would receive nothing for them.
|
|
|
| Sears Hometown and Outlet Stores, Inc. |
|
|
|
| Xxxxxx Xxxxx |
| Vice President, Human Resources |
5
