RESTRICTED SERIES 1 PREFERRED STOCK UNIT AWARD AGREEMENT UNDER THE FIF HE HOLDINGS LLC FIFTH AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT
Exhibit 10.11
RESTRICTED SERIES 1 PREFERRED STOCK UNIT AWARD AGREEMENT
UNDER THE FIF HE HOLDINGS LLC
FIFTH AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
UNDER THE FIF HE HOLDINGS LLC
FIFTH AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
This Award Agreement (this “Agreement”), dated as of [ ] (the “Grant Date”),
is made by and between FIF HE Holdings LLC (the “Company”) and [ ] (the
“Participant”).
WHEREAS, the Company has adopted the FIF HE Holdings LLC Fifth Amended and Restated Limited
Liability Company Agreement, dated as of [ ] (the “LLC Agreement”), which is incorporated
herein by reference and made a part of this Agreement. Capitalized terms not otherwise defined
herein shall have the same meanings as in the LLC Agreement; and
WHEREAS, the Company has determined that it would be in the best interests of the Company and
its members to grant the restricted preferred stock units (the “RSUs”) relating to Series 1
Class C Preferred Units (the “Class C Units”) and Series 1 Class D Preferred Units (the
“Class D Units” and together with the Class C Units, the “Units”) provided for
herein to the Participant pursuant to this Agreement and the LLC Agreement.
NOW THEREFORE, in consideration of the mutual covenants hereinafter set forth, the parties
agree as follows:
1. Award of RSUs. Subject to the terms and conditions hereof, the Company hereby
grants to the Participant (i) [ ] RSUs with respect to Class C Units and (ii) [ ] RSUs with
respect to Class D Units (collectively, the “Award”), and the Participant hereby accepts
the grant of such RSUs from the Company.
2. Vesting.
(a) General. Subject to the provisions set forth in this Section 2, the RSUs granted
to the Participant hereunder shall vest at such times and in the amounts set forth below, and the
applicable Units with respect thereto shall be delivered to the Participant within sixty (60) days
following each such date:
| Number of | Number of | |||
| Vesting Date | Class C Units | Class D Units | ||
[ ]
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[ ] | [ ] | ||
[ ]
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[ ] | [ ] | ||
[ ]
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[ ] | [ ] |
subject in each case to the continued Employment of the Participant from the date hereof through
the relevant “Vesting Date” set forth above, and provided that the Participant has not given or
received notice of termination of Employment, as of each such Vesting Date.
(b) Following Certain Terminations of Employment. Subject to the provisions of this
Section 2(b), upon termination of the Participant’s Employment for any reason, any RSUs which have
not vested pursuant to the terms of Section 2(a) shall be immediately forfeited by the Participant
and transferred to, and reacquired by, the Company without
consideration of any kind and neither the Participant nor any of the Participant’s successors,
heirs, assigns, or personal representatives shall thereafter have any further rights or interests
in such RSUs. Notwithstanding the foregoing:
(i) Upon an involuntary termination of the Participant’s Employment without Cause during the
six (6) month period following the occurrence of a Change in Control, 100% of the RSUs shall
immediately become vested and the applicable Units with respect thereto shall be delivered to the
Participant within sixty (60) days thereafter.
(ii) Upon an involuntary termination of the Participant’s Employment without Cause either (A)
prior to the occurrence of a Change in Control or (B) more than six (6) months following the
occurrence of a Change in Control, the number of RSUs that would have vested on the next scheduled
vesting date (if any) pursuant to the schedule set forth in Section 2(a) shall immediately become
vested and the applicable Units with respect thereto shall be delivered to the Participant within
sixty (60) days thereafter.
(iii) Upon a termination of the Participant’s Employment either by the Participant for Good
Reason or as a result of the death or Disability of the Participant, the number of RSUs that would
have vested on the next scheduled vesting date (if any) pursuant to the schedule set forth in
Section 2(a) shall immediately become vested and the applicable Units with respect thereto shall be
delivered to the Participant within sixty (60) days thereafter; provided, however, that no
termination of the Participant’s employment shall be deemed to be for Good Reason unless the
condition giving rise to Good Reason constitutes a material negative change in the Participant’s
employment relationship pursuant to Treasury Regulation section 1.409A-1(n)(2)(i).
(c) Conversion of Company; Qualified Public Offering. Upon a conversion of the
Company as set forth in Section 16.1 of the LLC Agreement, each RSU shall be subject to the terms
of Section 16.1(c) of the LLC Agreement. Upon the consummation of a Qualified Public Offering, a
proportion of the unvested shares into which such RSUs were converted pursuant to the immediately
preceding sentence equal to the proportion of RSUs that would have vested on the next scheduled
vesting date (if any) pursuant to the schedule set forth in Section 2(a) shall immediately become
vested and the applicable Units with respect thereto shall be delivered to the Participant within
sixty (60) days after the consummation of the Qualified Public Offering. The remaining unvested
shares (if any) shall remain subject to their terms as in effect immediately prior to the
conversion.
(d) Change in Control. For purposes of this Agreement, “Change in Control” shall
mean: (i) any sale or other disposition of all or substantially all of the assets of the Company
(including without limitation by way of a merger or consolidation or through the sale of all or
substantially all of the stock or equity of the Subsidiaries or sale of all or substantially all of
the assets of the Company and the Subsidiaries, taken as a whole) to another person other than an
Affiliate of Fortress Investment Group LLC if, immediately after giving effect thereto, any Person
(or group of Persons acting in concert), other than the Persons owning a majority of the Class A
Units (or other voting power of the Company) prior to such sale (together with their Affiliates),
will have the power to elect the Company Manager (or other similar governing Person(s) or body) of
the purchaser or surviving company; or (ii) any change in the ownership of the capital or equity of
the Company if, immediately after giving effect thereto, the persons owning a majority of the Class
A
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Units (or other voting power of the Company) prior to such change (together with their
Affiliates) shall own, in the aggregate, less than 50% of the equity interests of the Company.
3. Preferred Stock Units. Upon vesting, (i) each RSU with respect to Class C Units
granted hereunder shall represent the right to receive one (1) Class C Unit and (ii) each RSU with
respect to Class D Units granted hereunder shall represent the right to receive one (1) Class D
Unit, in each case, in accordance with the applicable schedule set forth in Section 2. The Class C
Units or Class D Units deliverable hereunder shall be Class C Units or Class D Units previously
issued to another member of the Company (“Outstanding Units”). Participant acknowledges
and agrees that (a) Outstanding Units may have accrued and unpaid Series 1 Class C Preferred Yield
or accrued and unpaid Series 1 Class D Preferred Yield (“Preferred Yield”) associated with
such Outstanding Units, (b) Participant shall not be entitled to retain any Preferred Yield
associated with such Outstanding Units relating to the period prior to January 1, 2010
(“Pre-2010 Preferred Yield”), (c) Participant shall be entitled to retain any Preferred
Yield associated with such Outstanding Units relating to the period from and after the January 1,
2010 (“Retained Preferred Yield”) offset by any payments made with respect to distributions
relating to Retained Preferred Yield under Section 5 (so that in no event shall there be any
duplication of payments), (d) all payments made with respect to any Outstanding Units shall be
deemed made first with respect to Pre-2010 Preferred Yield, and only after all such Pre-2010
Preferred Yield has been fully paid, then to the Retained Preferred Yield, (e) Participant agrees
to convey to the transferor of such Outstanding Units any payments with respect to Pre-2010
Preferred Yield that the Company mistakenly pays to Participant, and (f) Participant shall execute
and deliver to the Company and/or the transferor of any such Outstanding Units any additional
documents necessary or desirable to effectuate the foregoing.
4. Treatment of Units Upon Termination of Employment. Series 1 shall have the right
to exercise a right to purchase all or a portion of the Class C Units and Class D Units held by the
Participant within thirty (30) days after the Participant’s termination of Employment (for any
reason) with the Company or its Subsidiaries (the “Repurchase Rights”). If Series 1 does
not exercise its Repurchase Rights, the Fortress Holders shall have the right (but not the
obligation) to exercise the Repurchase Rights on the same terms and conditions as applicable to
Series 1 in this Section 4 and all references to Series 1 in this Section 4 shall be read to
include the Fortress Holders to the extent the Fortress Holders exercise the Repurchase Rights. If
the Repurchase Rights are exercised by Series 1 with respect to the Class C Units or Class D Units
upon the termination of the Participant’s employment, the Participant shall receive, no later than
ninety (90) days following the date on which the Repurchase Rights are exercised, an amount equal
to the sum of (i) the Invested Capital and any accrued and unpaid Series 1 Class C Preferred Yield
of each Class C Unit repurchased by the Company less the unpaid Pre-2010 Preferred Yield relating
to such Series 1 Class C Unit and (ii) the Invested Capital and any accrued and unpaid Series 1
Class D Preferred Yield of each Class D Unit repurchased by the Company less the unpaid Pre-2010
Preferred Yield relating to such Series 1 Class D Unit. In connection with any exercise of
Repurchase Rights pursuant to this Section 4, the Participant agrees to execute, acknowledge, and
deliver, or cause to be executed, acknowledged, and delivered, all instruments and documents that
may be reasonably requested by Series 1 in connection therewith.
5. Dividend Equivalents; Rights as a Member. Prior to the delivery of a Unit pursuant
to Section 2, the Participant shall have no rights of a Member of the Company with respect to such
Unit or the related RSU, including, without limitation, the right to vote such Units, the right to
consent with respect to such Units or, except as provided below, the right receive the current
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payment or accrual of any cash distributions declared by the Company with respect to such
Units. Prior to delivery of a Unit pursuant to Section 2, if the Company pays a distribution to
holders of Class C Units or Class D Units, then, within five days after the date such distribution
is paid, the Participant shall be entitled to receive a payment equal to the product of (i) the per
unit amount of such distribution (excluding any portion of such distribution that relates to
Pre-2010 Preferred Yield), and (ii) the number of RSUs held by the Participant that relate to that
class of unit.
6. Transfer of RSUs. Except as otherwise permitted by the Manager, the Participant
may not Transfer the RSUs. Notwithstanding anything set forth to the contrary in Section 9.1 of
the LLC Agreement, except as otherwise permitted by the Manager (or, if applicable, the board of
directors of the resulting entity), the Participant may not Transfer the Units on or after a
Qualified Public Offering unless the Participant has received prior written consent of the Company
Manager and applicable Series Manager with respect to any such Transfer and has complied with the
provisions of Sections 9.2 and 9.3 of the LLC Agreement. Unless the Manager (or, if applicable,
the board of directors of the resulting entity) determines otherwise, upon any attempt by the
Participant to Transfer the RSUs or Units in violation of this Section 6, such RSUs or Units, as
applicable, shall be immediately forfeited by the Participant without payment of any consideration.
7. Certain Covenants. By executing this Agreement, the Participant agrees to comply
with all applicable restrictive covenants contained in any agreement between the Company and the
Participant (the “Restrictive Covenants”) and acknowledges that the Participant’s
obligations with respect to the Restrictive Covenants constitutes a material inducement for the
Company’s grant of the Award to the Participant.
8. No Right to Continued Employment. The granting of the Award evidenced hereby and
this Agreement shall impose no obligation on the Company to continue the Employment of the
Participant and shall not lessen or affect the Company’s right to terminate the Employment of the
Participant.
9. Notices. Any notices provided hereunder must be in writing and shall be deemed
effective one (1) business day following personal delivery (including personal delivery by
facsimile and confirmation of receipt) or overnight delivery by a courier of national reputation to
the recipient at the address indicated below:
To the Company:
FIF HE Holdings LLC
c/o Fortress Investment Group LLC
0000 Xxxxxx xx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Facsimile: 212.798.6120
c/o Fortress Investment Group LLC
0000 Xxxxxx xx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Facsimile: 212.798.6120
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With a copy, which shall not constitute notice, to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxx
Facsimile: 917.777.3963
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxx
Facsimile: 917.777.3963
To the Participant:
[ ]
Facsimile: [_______]
Facsimile: [_______]
or to such other address or facsimile number or to the attention of such other person as the
recipient party will have specified by prior written notice to the sending party.
10. Governing Law. This Agreement and all claims arising out of or based upon this
Agreement or relating to the subject matter hereof shall be governed by and construed in accordance
with the domestic substantive laws of the State of Delaware without giving effect to any choice or
conflict of laws provision or rule that would cause the application of the domestic substantive
laws of any other jurisdiction.
11. Arbitration. Except as necessary for the Company and its successors or assigns or
the Participant to specifically enforce or enjoin a breach of this Agreement (to the extent such
remedies are otherwise available), the parties agree that any and all disputes that may arise in
connection with, arising out of or relating to this Agreement shall be submitted to binding
arbitration in Dallas, Texas according to the National Employment Dispute Resolution Rules and
procedures of the American Arbitration Association. The parties agree that the prevailing party in
any such dispute shall be entitled to reasonable attorneys’ fees, costs, and necessary
disbursements in addition to any other relief to which he or it may be entitled.
12. Specific Performance. The Participant acknowledges and agrees that the Company’s
remedies at law for a breach or threatened breach of the Restrictive Covenants would be inadequate
and the Company would suffer irreparable damages as a result of such breach or threatened beach.
In recognition of this fact, the Participant agrees that, in the event of such a breach or
threatened breach, in addition to any remedies at law, the Company, without posting any bond or
needing to prove the inadequacy of monetary damages, shall be entitled to cease making any payments
or providing any benefit otherwise required by this Agreement and obtain equitable relief in the
form of specific performance, temporary restraining order, temporary or permanent injunction or any
other equitable remedy which may then be available.
13. Tax Issues. THE ISSUANCE OF THE SUBJECT RSUs AND THE RELATED UNITS TO THE
PARTICIPANT PURSUANT TO THIS AGREEMENT INVOLVES COMPLEX AND SUBSTANTIAL TAX CONSIDERATIONS. THE
PARTICIPANT ACKNOWLEDGES THAT HE HAS CONSULTED HIS OWN TAX ADVISOR WITH RESPECT TO THE TRANSACTIONS
DESCRIBED IN THIS AGREEMENT. THE COMPANY MAKES NO WARRANTIES OR REPRESENTATIONS WHATSOEVER TO
THE PARTICIPANT REGARDING THE TAX CONSEQUENCES OF THE GRANT OF THE RSUs OR THE UNITS SUBJECT TO
THIS AWARD OR THIS AGREEMENT. THE PARTICIPANT
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ACKNOWLEDGES AND AGREES THAT THE PARTICIPANT SHALL BE SOLELY RESPONSIBLE FOR ANY TAXES ON THE
SUBJECT RSUs AND RELATED UNITS AND SHALL HOLD THE COMPANY, AND ALL OFFICERS, DIRECTORS, EMPLOYEES,
AGENTS AND ADVISORS OF THE COMPANY HARMLESS FROM ANY LIABILITY ARISING FROM ANY TAXES INCURRED BY
THE PARTICIPANT IN CONNECTION WITH THE RSUs AND THE UNITS SUBJECT TO THE AWARD AND THIS AGREEMENT.
14. Tax Withholding. The Participant shall pay to the Company promptly upon request,
and in any event at the time the Participant recognizes taxable income in respect to the RSUs, an
amount equal to the taxes the Company determines it is required to withhold at the lowest
applicable rate determined by the Company under applicable tax laws with respect to the RSUs. The
Participant may satisfy the foregoing requirement by making a payment to the Company in cash or by
electing to have the Company withhold RSUs from delivery or by delivering already owned
unrestricted RSUs to the Company, in each case, RSUs having a value equal to, or less than, the
minimum amount of tax required to be withheld, and paying any balance of the amount required to
satisfy withholding requirements in cash. Such RSUs shall be valued at their Fair Market Value on
the date as of which the amount of tax to be withheld is determined.
15. Award Subject to this Agreement and the LLC Agreement. By entering into this
Agreement the Participant agrees and acknowledges that the Participant has received and read this
Agreement and a copy of the LLC Agreement. The Award is subject to the LLC Agreement, as it may be
amended from time to time, and the terms and provisions of the LLC Agreement are hereby
incorporated herein by reference. The Participant agrees to be bound by the terms and provisions
of the LLC Agreement.
16. Waivers and Amendments. The respective rights and obligations of the Company and
the Participant under this Agreement may be waived (either generally or in a particular instance,
either retroactively or prospectively, and either for a specified period of time or indefinitely)
by such respective party. This Agreement may be amended only with the written consent of a duly
authorized representative of the Company and the Participant.
17. Certificates. All certificates, if any, evidencing Units or other securities of
the Company delivered under this Agreement shall be subject to such stop transfer orders and other
restrictions as the Company may deem advisable under this Agreement or the rules, regulations, and
other requirements of the Securities and Exchange Commission, any stock exchange upon which such
securities are then listed, and any applicable Federal or state laws, and the Company may cause a
legend or legends to be put on any such certificates to make appropriate reference to such
restrictions.
18. Severability. If any provision of this Agreement is or becomes or is deemed to be
invalid, illegal, or unenforceable in any jurisdiction or as to any Person or Award, or would
disqualify this Agreement or any Award under any law deemed applicable by the Company, such
provision shall be construed or deemed amended to conform to such applicable laws, or if it cannot
be construed or deemed amended without, in the determination of the Company, materially altering
the intent of this Agreement or the Award, such provision shall be stricken as to such
jurisdiction, Person or Award and the remainder of this Agreement and any such Award shall remain
in full force and effect.
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19. Section 409A Compliance. The intent of the parties is that payments and benefits
under this Agreement comply with Section 409A of the Internal Revenue Code of 1986, as amended (the
“Code”) to the extent subject thereto, and, accordingly, to the maximum extent permitted,
this Agreement shall be interpreted and be administered to be in compliance therewith.
Notwithstanding anything contained herein to the contrary, to the extent required in order to avoid
accelerated taxation and/or tax penalties under Section 409A of the Code, the Participant shall not
be considered to have terminated employment with the Company for purposes of this Agreement and no
payment shall be due to the Participant under this Agreement until the Participant would be
considered to have incurred a “separation from service” from the Company within the meaning of
Section 409A of the Code. Any payments described in this Agreement that are due within the
“short-term deferral period” as defined in Section 409A of the Code shall not be treated as
deferred compensation unless applicable law requires otherwise. Notwithstanding anything to the
contrary in this Agreement, to the extent that any RSUs are payable upon a separation from service
and such payment would result in the imposition of any individual excise tax and late interest
charges imposed under Section 409A of the Code, the settlement and payment of such awards shall
instead be made on the first business day after the date that is six (6) months following such
separation from service (or death, if earlier).
20. Successors and Assigns. Except as otherwise expressly provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon, the successors, assigns,
heirs, executors and administrators of the parties hereto.
21. Signature in Counterparts. This Agreement may be signed in counterparts, each of
which shall be an original, with the same effect as if the signatures thereto and hereto were upon
the same instrument.
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IN WITNESS WHEREOF AND INTENDING TO BE LEGALLY BOUND THEREOF, the parties hereto have executed
and delivered this Agreement as of the year and date first above written.
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