RESTRICTED STOCK AGREEMENT FINGERHUT DIRECT MARKETING, INC. 2003 EQUITY INCENTIVE PLAN (EXECUTIVES)
Exhibit 10.2(iv)
FINGERHUT DIRECT MARKETING, INC.
2003 EQUITY INCENTIVE PLAN
(EXECUTIVES)
2003 EQUITY INCENTIVE PLAN
(EXECUTIVES)
THIS AGREEMENT, made effective as of this __________ day of __________, ____, by and between
Fingerhut Direct Marketing, Inc., a Delaware corporation (the “Company”), and
_________________________ (“Participant”).
W I T N E S S E T H:
WHEREAS, the Participant on the date hereof is a key employee or officer of the Company; and
WHEREAS, the Company wishes to grant a restricted stock award to Participant for shares of the
Company’s Common Stock pursuant to the Company’s 2003 Equity Incentive Plan (the “Plan”); and
WHEREAS, the Administrator of the Plan has authorized the grant of a restricted stock award to
the Participant;
NOW, THEREFORE, in consideration of the premises and of the mutual covenants herein contained,
the parties hereto agree as follows:
1. Grant of Restricted Stock Award. The Company hereby grants to Participant on
the date set forth above a restricted stock award (the
“Award”) for
_____________________ ( ____ ) shares of Common Stock (the “Stock”) on the terms and conditions set forth
herein, and subject to adjustment pursuant to Section 12 of the Plan. The Company shall cause to
be issued a stock certificate representing such shares of Stock in the Participant’s name, and
shall deliver such certificate to the Participant; provided, however, that the Company shall place
a legend on such certificate describing the risks of forfeiture and other transfer restrictions set
forth in this Agreement and providing for the cancellation and return of such certificate if such
shares of Common Stock are forfeited as provided in Section 2 below. Until such risks of
forfeiture have lapsed or the shares subject to this Award have been forfeited pursuant to Section
2 below, the Participant shall be entitled to vote the shares represented by such stock
certificates and shall receive all dividends attributable to such shares, but the Participant shall
not have any other rights as a shareholder with respect to such shares.
2. Vesting of Restricted Stock.
a. The shares of Stock subject to this Award shall remain forfeitable until the vesting
dates set forth below:
| Vesting Date | Number of Shares | |
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If the Participant’s employment with the Company is terminated for any reason, including the
Participant’s voluntary resignation or retirement but excluding termination by the Company without
“cause,” at any time prior to the vesting date for the Award, the Participant shall immediately
forfeit all shares of Stock subject to this Award. If the Participant’s employment is terminated
by the Company without “cause” prior to the vesting date for this Award, all risks of forfeiture on
the shares of Stock subject to this Award shall immediately lapse.
b. Solely for purposes of this Paragraph 2(b), “cause” shall mean (i) Participant charged
with a felony or convicted of any criminal misdemeanor or more serious act; (ii) any intentional
and/or willful act of fraud or dishonesty by Participant related to or connected with Participant’s
employment by the Company or any of its Affiliates; (iii) the willful and/or continued failure,
neglect or refusal by Participant to perform his or her employment duties with the Company or any
of its Affiliates, (iv) a material violation of the Participant’s or an Affiliate’s policies or
codes of conduct; or (v) the willful and/or material breach by Participant of any agreement between
Participant and the Company or any of its Affiliates, including but not limited to an employment
agreement or a noncompetition agreement.
3. Miscellaneous.
a. Employment-at-Will. This Agreement shall not confer on Participant any right
with respect to continuance of employment by the Company or any of its Affiliates, nor will it
interfere in any way with the right of the Company to terminate such employment. Participant’s
employment relationship with the Company and its Affiliates shall be employment-at-will, and
nothing in this Agreement shall be construed as creating an employment contract for any specified
term between Participant and the Company or any Affiliate.
b. Securities Law Compliance. Participant shall not transfer or otherwise dispose
of the shares of Stock received pursuant to this Agreement until such time as counsel to the
Company shall have determined that such transfer or other disposition will not violate any state or
federal securities laws. The Participant may be required by the Company, as a condition of the
effectiveness of this restricted stock award, to agree in writing that all Stock subject to this
Agreement shall be held, until such time that such Stock is registered and freely tradable under
applicable state and federal securities laws, for Participant’s own account without a view to any
further distribution thereof, that the certificates for such shares shall bear an appropriate
legend to that effect and that such shares will be not transferred or disposed of except in
compliance with applicable state and federal securities laws.
c. Mergers, Recapitalizations, Stock Splits, Etc. Pursuant and subject to Section
12 of the Plan, certain changes in the number or character of the Common Stock of the
Company
(through merger, consolidation, exchange, reorganization, divestiture (including a spin-off),
liquidation, recapitalization, stock split, stock dividend or otherwise) shall result in an
adjustment, reduction or enlargement, as appropriate, in Participant’s rights with respect to the
shares of Stock subject to this Agreement.
d. Shares Reserved. The Company shall at all times during the term of this
Agreement reserve and keep available such number of shares as will be sufficient to satisfy the
requirements of this Agreement.
e. Withholding Taxes. In order to permit the Company to comply with all
applicable federal or state income tax laws or regulations, the Company may take such action as it
deems appropriate to insure that, if necessary, all applicable federal or state payroll, income or
other taxes are withheld from any amounts payable by the Company to the Participant. If the
Company is unable to withhold such federal and state taxes, for whatever reason, the Participant
hereby agrees to pay to the Company an amount equal to the amount the Company would otherwise be
required to withhold under federal or state law.
f. 2003 Equity Incentive Plan. The Award evidenced by this Agreement is granted
pursuant to the Plan, a copy of which Plan has been made available to Participant and is hereby
incorporated into this Agreement. This Agreement is subject to and in all respects limited and
conditioned as provided in the Plan. The Plan governs this Agreement. Except with respect to the
lockup provisions contained in Section 3.3 of Exhibit A, in the event of any questions as to the
construction of this Agreement or in the event of a conflict between the Plan and this Agreement,
the Plan shall govern.
g. Blue Sky Limitation. Notwithstanding anything in this Agreement to the
contrary, in the event the Company makes any public offering of its securities and determines, in
its sole discretion, that it is necessary to reduce the number of issued but unexercised stock
purchase rights so as to comply with any state securities or Blue Sky law limitations with respect
thereto, the Board of Directors of the Company shall accelerate the vesting of this restricted
stock award, provided that the Company gives Participant 15 days’ prior written notice of such
acceleration. Notice shall be deemed given when delivered personally or when deposited in the
United States mail, first class postage prepaid and addressed to Participant at the address of
Participant on file with the Company.
h. Accounting Compliance. Participant agrees that, if a merger, reorganization,
liquidation or other “transaction” as defined in Section 12 of the Plan occurs, and Participant is
an “affiliate” of the Company or any Affiliate (as defined in applicable legal and accounting
principles) at the time of such transaction, Participant will comply with all requirements of Rule
145 of the Securities Act of 1933, as amended, and the requirements of such other legal or
accounting principles, and will execute any documents necessary to ensure such compliance.
i. Additional Transfer Restrictions. Exhibit A attached hereto sets forth
additional transfer restrictions applicable to the shares of Stock issued or issuable to
Participant
under this Agreement. Such Exhibit may be amended from time-to-time in the manner set forth
therein.
j. Stock Legend. The Administrator may require that the certificates for any
shares of Common Stock purchased by Participant (or, in the case of death, Participant’s
successors) shall bear an appropriate legend to reflect the restrictions of Paragraph 4(b) and
Paragraphs 4(g) through 4(i) of this Agreement; provided, however, that failure to so endorse any
of such certificates shall not render invalid or inapplicable Paragraph 4(i).
k. Scope of Agreement. This Agreement shall bind and inure to the benefit of the
Company, its Affiliates and its successors and assigns and Participant and any successor or
successors of Participant permitted by this Agreement.
l. Arbitration. Any dispute arising out of or relating to this Agreement or the
alleged breach of it, or the making of this Agreement, including claims of fraud in the inducement,
shall be discussed between the disputing parties in a good faith effort to arrive at a mutual
settlement of any such controversy. If, notwithstanding, such dispute cannot be resolved, such
dispute shall be settled by binding arbitration. Judgment upon the award rendered by the
arbitrator may be entered in any court having jurisdiction thereof. The arbitrator shall be a
retired state or federal judge or an attorney who has practiced securities or business litigation
for at least 10 years. If the parties cannot agree on an arbitrator within 20 days, any party may
request that the chief judge of the District Court for Hennepin County, Minnesota, select an
arbitrator. Arbitration will be conducted pursuant to the provisions of this Agreement, and the
commercial arbitration rules of the American Arbitration Association, unless such rules are
inconsistent with the provisions of this Agreement. Limited civil discovery shall be permitted for
the production of documents and taking of depositions. Unresolved discovery disputes may be
brought to the attention of the arbitrator who may dispose of such dispute. The arbitrator shall
have the authority to award any remedy or relief that a court of this state could order or grant;
provided, however, that punitive or exemplary damages shall not be awarded. The arbitrator may
award to the prevailing party, if any, as determined by the arbitrator, all of its costs and fees,
including the arbitrator’s fees, administrative fees, travel expenses, out-of-pocket expenses and
reasonable attorneys’ fees. Unless otherwise agreed by the parties, the place of any arbitration
proceedings shall be Hennepin County, Minnesota.
5. Change of Control. Notwithstanding anything in the Plan or this Agreement to
the contrary, in the event of a “change of control,” all risks of forfeiture on the shares of Stock
subject to this Award shall immediately lapse unless (i) Participant’s employment continues with
the surviving entity, and (ii) the surviving entity assumes this Award or replaces this Award with
a restricted stock award for an equivalent number of such entity’s voting securities and
substantially similar terms, including but not limited to the vesting period set forth in Paragraph
2. If Participant’s employment with the Company or any Affiliate is terminated in connection with
the change of control, or if Participant’s employment with the surviving entity is terminated
without “cause” (as defined in Paragraph 2(b) above) within eighteen (18) months following the date
of the change of control, all risks of forfeiture on the shares of Stock subject to this Award, or
the replacement award, as the case may be, shall immediately lapse.
For purposes of this Paragraph 5, a “change of control” means:
a The consummation of any merger, consolidation, exchange, or reorganization to which the
Company is a party if the individuals and entities who were shareholders of the Company immediately
prior to the effective date of such transaction have, immediately following the effective date of
such transaction, beneficial ownership (as defined in Rule 13d-3 under the Securities Exchange Act
of 1934) of less than twenty percent (20%) of the total combined voting power of all classes of
securities issued by the surviving corporation for the election of directors of the surviving
corporation;
b. The shareholders of the Company approve any plan or proposal for the liquidation of the
Company;
c. A sale, lease or other transfer of all or substantially all of the assets of the
Company to any person or entity which is not an Affiliate of the Company; or
d. The acquisition, without prior approval by resolution adopted by the Board, of direct
or indirect beneficial ownership (as defined in Rule 13d-3 under the Securities Exchange Act of
1934) of securities of the Corporation representing, in the aggregate, eighty percent (80%) or more
of the total combined voting power of all classes of the Company’s then-issued and outstanding
securities by any person or entity or by a group of associated persons or entities acting in
concert; provided, however, that a change of control will not be deemed to occur if such
acquisition is initiated by Participant or an entity in which Participant owns eighty percent (80%)
or more of the total combined voting power of all classes of such entity’s securities, or if
Participant or such entity is a member of the group of associated persons or entities acting in
concert.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed on the day
and year first above written.
| FINGERHUT DIRECT MARKETING, INC. |
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| By: | ||||
| Its: | ||||
| Participant | ||||
