EDDIE BAUER HOLDINGS, INC. RESTRICTED STOCK UNIT AGREEMENT (Inducement Award Issued Outside Plan)
Exhibit 10.35
NEITHER THIS AGREEMENT NOR THE SECURITIES ISSUED PURSUANT TO THIS AGREEMENT HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND THEY MAY NOT BE OFFERED,
SOLD, PLEDGED, HYPOTHECATED, ASSIGNED OR TRANSFERRED EXCEPT (i) PURSUANT TO A REGISTRATION
STATEMENT UNDER THE SECURITIES ACT WHICH HAS BECOME EFFECTIVE AND IS CURRENT WITH RESPECT TO THESE
SECURITIES, OR (ii) PURSUANT TO A SPECIFIC EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT,
BUT ONLY UPON A HOLDER HEREOF FIRST HAVING OBTAINED THE WRITTEN OPINION OF COUNSEL TO THE ISSUER,
OR OTHER COUNSEL, REASONABLY ACCEPTABLE TO THE ISSUER, THAT THE PROPOSED DISPOSITION IS CONSISTENT
WITH ALL APPLICABLE PROVISIONS OF THE SECURITIES ACT AS WELL AS ANY APPLICABLE “BLUE SKY” OR OTHER
SIMILAR SECURITIES LAW.
This Restricted Stock Unit Agreement (this “Agreement”), is made and entered into as of
the day of month (the “Date of Grant”), by and between Xxxxx Xxxxx Holdings, Inc., a Delaware
corporation (the “Company”), and name (“Grantee”).
R E C I T A L S
A. WHEREAS, pursuant to the terms of an offer letter dated date, Grantee has accepted an offer
to be employed by and render personal services to the Company as its title, commencing date; and
B. WHEREAS, on date, pursuant to a duly noticed meeting of the Board of Directors of the
Company (the “Board”), the Board authorized the grant to Grantee on date of # restricted stock
units (“Restricted Stock Units”) representing a contractual right to receive one share of Company
common stock (“Common Stock”) for each Restricted Stock Unit at the Payment Date set forth herein;
and
C. WHEREAS, the grant of Restricted Stock Units are an inducement for Grantee to accept
initial employment with the Company and are not granted under the terms of the Xxxxx Xxxxx
Holdings, Inc. 2005 Stock Incentive Plan, as amended or restated from time to time (the “Plan”),
but are granted outside the Plan under this individual Restricted Stock Unit Agreement; and
D. WHEREAS, the Company desires to grant to Grantee, and Grantee desires to accept, the
Restricted Stock Units representing the contractual right to acquire shares of its Common Stock, on
the terms and subject to the conditions set forth herein.
A G R E E M E N T
NOW, THEREFORE, in consideration of the premises and the benefits to be derived from the
mutual observance of the covenants and promises contained herein and other good and valuable
consideration, the sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. Basis for Award. This award is made in accordance with the terms of an offer
letter dated date, the action of the Board on date and the inducement award provisions under NASDAQ
Marketplace Rule 4350. The Grantee hereby receives as of the date hereof an award of Restricted
Stock Units pursuant to the terms of this Agreement (the “Grant”).
2. Units Awarded.
(a) The Company hereby awards to the Grantee, Restricted Stock Units for # shares of Common
Stock . Restricted Stock Units are hypothetical Common Stock units having a value equal to the
Fair Market Value of an identical number of shares of the Company’s Common Stock. Each Restricted
Stock Unit represents a contractual right to receive one share of Common Stock from the Company at
the Payment Date set forth in this Agreement.
(b) The Company shall in accordance with the Plan establish and maintain a Restricted Stock
Unit account for the Grantee, and such account shall be credited for the number of Restricted Stock
Units granted to the Grantee. The Restricted Stock Unit Account shall be credited for any
securities or other property (including regular cash dividends) distributed by the Company in
respect of its Common Stock. Any such property shall be subject to the same vesting schedule as
the Restricted Stock Units to which they relate.
(c) Until the Restricted Stock Units awarded to the Grantee shall have vested and become
payable on the Payment Date specified in this Agreement, the Restricted Stock Units and any related
securities, cash dividends or other property nominally credited to a Restricted Stock Unit account
may not be sold, transferred, or otherwise disposed of and may not be pledged or otherwise
hypothecated.
3. Administration. The Compensation Committee of the Board or its duly authorized
delegate (the “Administrator”) shall have discretionary authority to administer and interpret the
terms of this Agreement. Any dispute regarding the interpretation of this Agreement shall be
submitted by Grantee or the Company to the Administrator for review. The resolution of such a
dispute by the Administrator shall be final and binding on the Company and Grantee and all other
persons.
4. Vesting. The Restricted Stock Units covered by this Agreement shall become 100%
vested and the restrictions on transfer shall lapse if Grantee continues to be providing continuous
services as an employee, director or consultant (“Continuous Service”) to the Company on date.
Upon the occurrence of a Change in Control, the Restricted Stock shall become 100% vested on such
event and the restrictions on transfer shall lapse. Except as otherwise provided in this Section,
if the Grantee ceases Continuous Service for any other reason, the unvested Restricted Stock Units
shall be forfeited immediately. For purposes of this Agreement, the term “Change in Control” shall
have the same meaning as such term is defined
under the terms of the Plan or any successor thereto, including any modification or amendment
that may be adopted after the date of this Agreement.
5. Payment. Subject to Grantee’s satisfaction of applicable withholding requirements
pursuant to Section 8 hereof, payment shall be made in shares of Common Stock as soon as
practicable after the Vesting Date set forth herein (the “Payment Date”), but not later than two
and one half months after the end of the calendar year in which the Payment Date occurs. The
Administrator shall cause a stock certificate to be delivered to the Grantee with respect to such
shares free of all restrictions hereunder, except for applicable federal and or state securities
laws restrictions. Any securities, cash dividends or other property credited to the Restricted
Stock Unit account other than Restricted Stock Units shall be paid in kind, or, in the discretion
of the Administrator, in cash.
6. Deferral Election. Grantee may make a one-time election to defer the timing of the
payment of the Restricted Stock Units and have such amount paid at a later date pursuant to the
terms of the Xxxxx Xxxxx Holdings, Inc. Nonqualified Deferred Compensation Plan, subject to the
following terms and conditions:
(a) The deferral election must be made within 30 days after the Grant of the Restricted Stock
Units;
(b) the deferral election must be made at least 12 months in advance of the earliest Vesting
Date at which the forfeiture condition could lapse;
(c) the deferral election may not take effect until at least 12 months after the date on which
it is made; and
(d) the deferral election must postpone the Payment Date for a period of at least five years
from the date the Restricted Stock Units would otherwise become payable or at least five years from
the date the first payment of the Common Stock otherwise would become payable.
7. Compliance with Laws and Regulations.
(a) Securities Registration. The issuance of Common Stock upon vesting of the
Restricted Stock Units shall be subject to compliance by the Company and the Grantee with all
applicable requirements of securities laws, other applicable laws and regulations of any stock
exchange or interdealer quotation system on which the Common Stock may be listed at the time of
such issuance or transfer. The Grantee understands that the Company is under no obligation to
register or qualify the Common Stock with the Securities and Exchange Commission, any state
securities commission or any stock exchange to effect such compliance. Regardless of whether the
shares of Common Stock that may be issued pursuant to this Agreement have been registered under the
Securities Act or have been registered or qualified under the securities laws of any state, the
Company at its discretion may impose restrictions upon the sale, pledge or other transfer of such
Common Stock (including the placement of appropriate legends on stock certificates or the
imposition of stop-transfer instructions) if, in the judgment of the Company, such restrictions are
necessary or desirable in order to achieve compliance with the Securities Act, the securities laws
of any state or any other law. In connection with the Grant or vesting of
the Restricted Stock units or the payment of Common Stock in settlement of such Grant, the
Grantee will make or enter into such written representations, warranties and agreements as the
Administrator may reasonably request in order to comply with applicable securities laws or with
this Agreement.
(b) Market Stand-Off. If an underwritten public offering by the Company of its equity
securities occurs pursuant to an effective registration statement filed under the Securities Act,
including a secondary public offering by the Company, the Optionee shall not sell, make any short
sale of, loan, hypothecate, pledge, grant any option for the repurchase of, transfer the economic
consequences of ownership or otherwise dispose or transfer for value or otherwise agree to engage
in any of the foregoing transactions with respect to any shares of Common Stock acquired pursuant
to this Agreement without the prior written consent of the Company or its underwriters, for such
period of time from and after the effective date of such registration statement as may be requested
by the Company or such underwriters (the “Market Stand-Off”). In order to enforce the Market
Stand-Off, the Company may impose stop-transfer instructions with respect to the Common Stock
acquired under this Agreement until the end of the applicable stand-off period. If there is any
change in the number of outstanding shares of Common Stock by reason of a stock split, reverse
stock split, stock dividend, recapitalization, combination, reclassification, dissolution or
liquidation of the Company, any corporate separation or division (including, but not limited to, a
split-up, a split-off or a spin-off), a merger or consolidation; a reverse merger or similar
transaction, then any new, substituted or additional securities which are by reason of such
transaction distributed with respect to any Common Stock subject to the Market Stand-Off, or into
which such Common Stock becomes convertible, shall immediately be subject to the Market Stand-Off.
8. Tax Withholding. As a condition to payment under Section 5 hereof, the
Grantee agrees that no later than the Payment Date, the Grantee shall pay to the Company (in cash
or to the extent permitted by the Administrator, Common Stock held by the Grantee whose Fair Market
Value on the day preceding the date the Restricted Stock Units vests is equal to the amount of the
Grantee’s tax withholding liability, including shares of Common Stock that otherwise would be
subject to settlement on the Payment Date pursuant to the Restricted Stock Units) any federal,
state or local taxes of any kind required by law to be withheld, if any, with respect to the Common
Stock received in settlement of the Restricted Stock Units for which the restrictions shall lapse.
Alternatively, the Company or its affiliates shall, to the extent permitted by law, have the right
to deduct from any payment of any kind otherwise due to the Grantee (including payments due when
the Restricted Stock Units vest) any federal, state or local taxes of any kind required by law to
be withheld with respect to the shares of Common Stock settled on the Payment Date.
9. Section 409A Limitation. It is the parties intention that this arrangement comply
with Internal Revenue Code Section 409A. In the event the Administrator determines at any time
that this Restricted Stock Unit constitutes “nonqualified deferred compensation” within the meaning
of Section 409A of the Code, notwithstanding any provision of this Agreement to the contrary, the
Agreement shall satisfy the additional conditions applicable to nonqualified deferred compensation
under Section 409A of the Code. Therefore, unless the parties explicitly agree that this provision
is inapplicable, notwithstanding anything to the contrary in this or any other agreement:
(a) A deferral election or second election or change in the time or form of benefit payments
that would violate Section 409A shall have no legal effect, and the Grantee shall have the right to
receive the amount (and will be taxable on it) as if it had been paid when it would have been paid
absent the illegal election. The Grantee promises to repay, with interest at the applicable
federal rate, any amount paid prior to the specified Payment Date in violation of Section 409A.
(b) If the Company mistakenly defers more than the Grantee elected, the excess amount deferred
shall be a nonelective Company deferral payable at the time and in the manner as the elected
deferral. The Grantee hereby authorizes withholding the mistaken amount from his or her Grant.
(c) If the Company mistakenly defers less than the Grantee elected, the deficiency shall be
credited to the employee as soon as discovered. The Grant thereafter shall be reduced (without
adverse consequences to the employer) in a reasonable way specified by the Company to offset the
cost of correcting the deficiency.
(d) In lieu of the foregoing, the employer unilaterally may take any other steps that will
prevent any of the errors described above from violating Section 409A.
(e) Notwithstanding the foregoing, the Company shall have no liability to any Participant or
any other person if the terms of this Agreement do not satisfy the additional conditions applicable
to nonqualified deferred compensation under Section 409A of the Code.
10. Nontransferability. This Agreement is not transferable. However, this Agreement
shall be binding upon and shall inure to the benefit of any successor or successors of the Company.
11. No Right to Continued Employment. Nothing in this Agreement shall be deemed by
implication or otherwise to impose any limitation on any right of the Company or any of its
affiliates to terminate the Grantee’s Continuous Service at any time, in the absence of a specific
written agreement to the contrary.
12. No Right to Future Awards. This Grant of Restricted Stock Units is discretionary.
This Agreement does not confer on Grantee any right or entitlement to receive another Grant of
Restricted Stock Units or any other equity-based award at any time in the future or in respect of
any future period.
13. Representations and Warranties of Grantee. The Grantee represents and warrants to
the Company that:
(a) Agreement to Terms. The Grantee has received a copy of this Agreement and has
read and understands the terms of this Agreement, and agrees to be bound by the terms and
conditions. The Grantee acknowledges that there may be adverse tax consequences upon the vesting
of Restricted Stock Units or thereafter if the Common Stock is paid and if the Grantee later
disposes of the Common Stock, and that the Grantee should consult a tax advisor prior to such time.
(b) Cooperation. The Grantee agrees to sign such additional documentation as may
reasonably be required from time to time by the Company.
(c) Securities Representations. In addition, the Grantee hereby makes the following
additional representations:
1. The Grantee is acquiring the shares of Common Stock for his own account for
investment purposes only and not with a view towards distribution.
2. The Grantee understands that the shares of Common Stock to be issued under this
Agreement may not be registered under the Securities Act or under any state securities laws
and therefore Grantee may not be able to dispose of any of the Common Stock unless and until
such shares are subsequently registered under the Securities Act and applicable state
securities laws or exemptions from such registration are available.
3. The Grantee understands that Rule 144 promulgated under the Securities Act may
indefinitely restrict transfer of the Common Stock so long as the Grantee remains an
“affiliate” of the Company or if “current public information” about the Company (as defined
in Rule 144) is not publicly available.
(d) Obligation To Sell. Notwithstanding anything herein to the contrary, if at any
time following Grantee’s acquisition of shares of Common Stock hereunder, stockholders of the
Company owning 51% or more of the shares of the Company (on a fully diluted basis) (the “Control
Sellers”) enter into an agreement (including any agreement in principal) to transfer all of their
shares to any person or group of persons who are not affiliated with the Control Sellers, such
Control Sellers may require each stockholder who is not a Control Seller (a “Non-Control Seller”)
to sell all of their shares to such person or group of persons at a price and on terms and
conditions the same as those on which such Control Sellers have agreed to sell their shares, other
than terms and conditions relating to the performance or non-performance of services. For the
purposes of the preceding sentence, an affiliate of a Control Seller is a person who controls,
which is controlled by, or which is under common control with, the Control Seller. Grantee agrees
to honor any obligations Grantee may have as a Non-Control Seller.
14. Adjustment Upon Changes in Capitalization. If any change is made in the Common
Stock subject to the Grant, without the receipt of consideration by the Company (through merger,
consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in
property other than cash, stock split, liquidating dividend, combination of shares,
exchange of shares, change in corporate structure or other transaction not involving the
receipt of consideration by the Company), then the number and class of shares relating to the
Restricted Stock Units in effect prior to such change shall be proportionately adjusted by the
Administrator to reflect any increase or decrease in the number of issued shares of Common Stock or
change in the Fair Market Value of such Common Stock resulting from such transaction; provided,
however, that any fractional shares resulting from the adjustment may be eliminated by a cash
payment. The Administrator shall make such adjustments in a manner that is intended to provide an
appropriate adjustment that neither increases nor decreases the value of such Award as in effect
immediately prior to such corporate change, and its determination shall be final, binding and
conclusive. The conversion of any securities of the Company that are by their terms convertible
shall not be treated as a transaction “without receipt of consideration” by the Company. The
Administrator’s adjustment shall be effective, final, binding and conclusive for all purposes of
this Agreement.
15. Governing Law. This Agreement shall be governed by the laws of the State of
Delaware without giving effect to such state’s conflict of law principles. If any provision of
this Agreement is determined by a court of law to be illegal or unenforceable, then such provision
will be enforced to the maximum extent possible and the other provisions will remain fully
effective and enforceable.
16. Defined Terms. Except as otherwise provided herein, or unless the context clearly
indicates otherwise, capitalized terms used herein shall have the definitions as provided herein.
The masculine pronoun shall be deemed to include the feminine, and the singular number shall be
deemed to include the plural unless a different meaning is plainly required by the context.
17. Miscellaneous Terms.
(a) Notices. Any notice necessary under this Agreement shall be addressed to the
Company in care of its General Counsel at the principal executive office of the Company at 00000 XX
0xx Xxxxxx, Xxxxxxxx, XX 00000 and to the Grantee at the address appearing in the records of the
Company for the Grantee or to either party at such other address as either party hereto may
hereafter designate in writing to the other. All notices shall be deemed to have been given or
delivered upon: (a) personal delivery; (b) five (5) days after deposit in the United States mail
by certified or registered mail (return receipt requested); (c) two (2) business day after deposit
with any return receipt express courier (prepaid); or (d) one (1) business day after transmission
by facsimile.
(b) Headings. The headings of sections and subsections are included solely for
convenience of reference and shall not affect the meaning of the provisions of this Agreement.
(c) Counterparts. This Agreement may be executed in two or more counterparts, each of
which shall be deemed to be an original but all of which together will constitute one and the same
instrument.
(d) Entire Agreement. This Agreement constitutes the entire agreement between the
parties hereto with regard to the subject matter hereof. It supersedes all other agreements,
representations or understandings (whether oral or written and whether express or implied) that
relate to the subject matter hereof.
18. Amendment. The terms of this Agreement may not be altered or amended in any
manner that would impair the rights of the Grantee hereunder except by a written instrument signed
by the Company and the Grantee. Notwithstanding the foregoing, if any provision of the Agreement
contravenes Section 409A of the Code, the Company may reform the Agreement or any provision hereof
to maintain to the maximum extent practicable the original intent of the provision without
violating the provisions of Section 409A.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly
authorized representative and Grantee has executed this Agreement, on the dates indicated opposite
their respective signatures, effective as of the Date of Grant.
| XXXXX XXXXX HOLDINGS, INC. | ||||||||
Date:
|
By: | |||||||
| GRANTEE | ||||||||
Date: |
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| name, in his individual capacity | ||||||||
