PERFORMANCE STOCK AWARD AGREEMENT
Exhibit
10.30
THIS
AGREEMENT is entered into and effective as of _________,
2006
(the “Date of Grant”), by and between Select Comfort Corporation (the “Company”)
and ____________________ (the “Grantee”).
A. The
Company has adopted the Select Comfort Corporation 2004 Stock Incentive Plan
(the “Plan”) authorizing the grant of Performance Stock Awards to employees and
non-employee directors, consultants and independent contractors of the Company
and its Subsidiaries (as defined in the Plan).
B. The
Company desires to give the Grantee a proprietary interest in the Company
and an
added incentive to advance the interests of the Company by granting to the
Grantee a Performance Stock Award pursuant to the Plan.
Accordingly,
the parties agree as follows:
1. Grant
of Award.
The
Company hereby grants to the Grantee a Performance Stock Award (the “Award”)
consisting of _______________________ (_______________) shares (the “Award
Shares”) of the Company’s common stock, par value $0.01 per share (the “Common
Stock”), subject to adjustment based on performance of the Company as described
below and subject to the terms, conditions and restrictions set forth below
and
in the Plan.
The
number of Award Shares granted hereunder is subject to adjustment based on
the
Company’s net operating profit performance in fiscal year 2006 (the “Performance
Period”). Based on the Company’s actual net operating profit during the
Performance Period as a percentage of planned net operating profit during
the
Performance Period, the number of Award Shares will be multiplied by the
factor
set forth in the table below to determine the “Adjusted Award
Shares.”
|
Actual
2006 Net Operating Profit as a Percentage of Planned
2006 Net Operating Profit
|
Factor
to Multiply Award Shares by to Arrive
at Adjusted Award Shares
|
|
Greater
than 115% of Plan
|
1.50X
|
|
Greater
than 110% up to 115% of Plan
|
1.25X
|
|
Greater
than 90% up to 110% of Plan
|
1.00X
|
|
Greater
than 85% up to 90% of Plan
|
0.75X
|
|
Greater
than 75% up to 85% of Plan
|
0.50X
|
|
Up
to 75% of Plan
|
0.20X
|
For
example, if the Award Shares consist of 1,000 shares of Common Stock, and
the
Company’s actual net operating profit in 2006 is equal to 112% of planned 2006
net operating profit, then the Adjusted Award Shares would consist of 1,250
shares of Common Stock (1,000 X 1.25 = 1,250).
Reference
to the Adjusted Award Shares in this Agreement will be deemed to include
the
Dividend Proceeds (as defined in Section 3.3 of this Agreement) with respect
to
such Adjusted
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Award
Shares that are retained and held by the Company as provided in Section 3.3
of
this Agreement.
2. Grant
Restriction.
2.1 Restriction
and Forfeiture.
The
Grantee’s right to retain the Award Shares or the Adjusted Award Shares will be
subject to the Grantee remaining in the continuous employ or service of the
Company or any Subsidiary for a period of four (4) years (the “Restriction
Period”) following the Date of Grant; provided, however, that such
employment/service period restrictions (the “Restrictions”) will lapse and
terminate prior to end of the Restriction Period as set forth in Sections
2.2
and 2.3 below.
2.2 Termination
of Employment or Other Service.
(a) Termination
Due to Death or Disability.
In the
event that the Grantee’s employment or other service with the Company and all
Subsidiaries is terminated by reason of the Grantee’s death or Disability (as
defined in the Plan) during the Performance Period, the Restrictions applicable
to the Award Shares will immediately lapse and terminate and the Award Shares
will not be subject to further adjustment. In the event that the Grantee’s
employment or other service with the Company and all Subsidiaries is terminated
by reason of the Grantee’s death or Disability (as defined in the Plan) after
the Performance Period, the Restrictions applicable to the Adjusted Award
Shares
will immediately lapse and terminate.
(b) Termination
Due to Retirement.
In the
event that the Grantee’s employment or other service with the Company and all
Subsidiaries is terminated by reason of the Grantee’s Retirement (as defined in
the Plan) during the Performance Period, the Restrictions applicable to the
Award Shares will immediately lapse and terminate with respect to a pro rata
portion of the Award Shares on the basis of the portion of the Restriction
Period that has passed as of the date of the Retirement and the Award Shares
will not be subject to further adjustment. In the event that the Grantee’s
employment or other service with the Company and all Subsidiaries is terminated
by reason of the Grantee’s Retirement (as defined in the Plan) after the
Performance Period, the Restrictions applicable to the Adjusted Award Shares
will immediately lapse and terminate with respect to a pro rata portion of
the
Adjusted Award Shares on the basis of the portion of the Restriction Period
that
has passed as of the date of the Retirement.
(c) Termination
for Reasons other than Death, Disability or Retirement.
In the
event the Grantee’s employment or other service with the Company and all
Subsidiaries is terminated for any reason other than death, Disability or
Retirement, or the Grantee is in the employ or service of a Subsidiary and
the
Subsidiary ceases to be a Subsidiary of the Company (unless the Grantee
continues in the employ or service of the Company or another Subsidiary),
all
rights of the Grantee under the Plan and this Agreement will terminate
immediately without notice of any kind, and this Award will be terminated
and
all Award Shares or Adjusted Award Shares with respect to which the Restrictions
have not lapsed will be forfeited.
2.3 Change
in Control.
If a
Change in Control (as defined in the Plan) of the Company occurs during the
Performance Period, the Restrictions applicable to the Award Shares will
immediately lapse and terminate. If a Change in Control (as defined in the
Plan)
of the Company occurs after the Performance Period, the Restrictions applicable
to the Adjusted Award Shares will immediately lapse and terminate.
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3. Issuance
of Award Shares.
3.1 Privileges
of a Shareholder; Transferability.
As soon
as practicable after the execution and delivery of this Agreement and the
satisfaction of any conditions to the effective issuance of the Award Shares,
the Grantee will be recorded on the books of the Company as the owner of
the
Award Shares, and the Company will issue one or more duly issued and executed
stock certificates evidencing the Award Shares. As soon as practicable after
the
determination of the results of the Performance Period, if any adjustment
of the
Award Shares is required, the certificate representing the Award Shares will
be
cancelled and the Grantee will be recorded on the books of the Company as
the
owner of the Adjusted Award Shares, and the Company will issue one or more
duly
issued and executed stock certificates evidencing the Adjusted Award Shares.
Except as otherwise expressly provided in this Agreement, the Grantee will
have
all voting, dividend, liquidation and other rights with respect to the Award
Shares or the Adjusted Award Shares in accordance with their terms upon becoming
the holder of record of the Award Shares or the Adjusted Award Shares; provided,
however, that prior to the lapse or other termination of the Restrictions
applicable to the Award Shares or the Adjusted Award Shares, such Award Shares
or Adjusted Award Shares will not be assignable or transferable by the Grantee,
either voluntarily or involuntarily, and may not be subjected to any lien,
directly or indirectly, by operation of law or otherwise. Any attempt to
transfer, assign or encumber the Award Shares or the Adjusted Award Shares
other
than in accordance with this Agreement and the Plan will be null and void
and
will void the Award, and all Award Shares or Adjusted Award Shares for which
the
Restrictions have not lapsed will be forfeited and immediately returned to
the
Company.
3.2 Enforcement
of Restrictions.
To
enforce the Restrictions imposed by this Agreement and the Plan, the Company
may
place a legend on the stock certificates referring to the Restrictions and
may
require the Grantee, until the Restrictions have lapsed with respect to Award
Shares or the Adjusted Award Shares, to keep the stock certificates evidencing
such Award Shares or Adjusted Award Shares, together with duly endorsed stock
powers, in the custody of the Company or its transfer agent or to maintain
evidence of stock ownership of such Award Shares or Adjusted Award Shares,
together with duly endorsed stock powers, in a certificateless book-entry
stock
account with the Company’s transfer agent.
3.3 Dividends
and Other Distributions.
Unless
the Compensation Committee of the Board of Directors (the “Committee”)
determines otherwise in its sole discretion (including, without limitation,
at
any time after the grant of the Performance Stock Award), any dividends or
distributions (including, without limitation, any cash dividends, stock
dividends or dividends in kind, the proceeds of any stock split or the proceeds
resulting from any changes or exchanges described in Section 6 of this
Agreement, all of which are referred to herein collectively as the “Dividend
Proceeds”) that are paid or payable with respect to shares of Common Stock
subject to the unvested portion of a Performance Stock Award will be subject
to
the same rights and restrictions under this Agreement as the shares to which
such dividends or distributions relate. The Committee may, in its sole
discretion, distribute such Dividend Proceeds to the Grantee or it may retain
and hold such Dividend Proceeds subject to the Restrictions and the other
terms
and conditions of this Agreement. In the event the Committee determines not
to
pay such Dividend Proceeds currently, the Committee will determine in its
sole
discretion whether any interest will be paid on such Dividend Proceeds. In
addition, the Committee in its sole discretion may require such Dividend
Proceeds to be reinvested (and in such case the Committee may require the
Participant’s consent to such reinvestment) in shares of Common Stock that will
be subject to the same restrictions as the shares to which such Dividend
Proceeds relate. In addition, the Committee may, in its sole discretion,
cause
such Dividend Proceeds to be paid to the Company
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pursuant
to Section 5 of this Agreement in order to satisfy any federal, state or
local
withholding or other employment-related tax requirements attributable to
such
dividends or distributions or to the Grantee’s receipt of the Award or the lapse
or termination of the Restrictions applicable to Award Shares or Adjusted
Award
Shares.
4. Rights
of Grantee.
4.1 Employment
or Service.
Nothing
in this Agreement will interfere with or limit in any way the right of the
Company or any Subsidiary to terminate the employment or service of the Grantee
at any time, nor confer upon the Grantee any right to continue in the employ
or
service of the Company or any Subsidiary at any particular position or rate
of
pay or for any particular period of time.
4.2 Rights
as a Shareholder.
The
Grantee will have no rights as a shareholder until the Grantee becomes the
holder of record of such Award Shares or Adjusted Award Shares, and no
adjustment will be made for dividends or distributions with respect to the
Award
Shares or Adjusted Award Shares as to which there is a record date preceding
the
date the Grantee becomes the holder of record of the Award Shares or Adjusted
Award Shares, except as may otherwise be provided in the Plan or determined
by
the Committee in its sole discretion.
5. Withholding
Taxes.
The
Company is entitled to (a) withhold and deduct from future wages of the Grantee
(or from other amounts that may be due and owing to the Grantee from the
Company), or cause to be paid to the Company out of Dividend Proceeds, or
make
other arrangements for the collection of all legally required amounts necessary
to satisfy any federal, state or local withholding and employment-related
tax
requirements attributable to the receipt of the Award, the receipt of dividends
or distributions on Award Shares or Adjusted Award Shares, or the lapse or
termination of the Restrictions applicable to Award Shares or Adjusted Award
Shares, or (b) require the Grantee promptly to remit the amount of such
withholding to the Company. In the event that the Company is unable to withhold
such amounts, for whatever reason, the Grantee agrees to pay to the Company
an
amount equal to the amount the Company would otherwise be required to withhold
under federal, state or local law.
6. Adjustments.
In
the
event of any reorganization, merger, consolidation, recapitalization,
liquidation, reclassification, stock dividend, stock split, combination of
shares, rights offering or divestiture (including a spin-off) or any other
change in the corporate structure or shares of the Company, the Committee
(or,
if the Company is not the surviving corporation in any such transaction,
the
board of directors of the surviving corporation), in order to prevent dilution
or enlargement of the rights of the Grantee, will make appropriate adjustment
(which determination will be conclusive) as to the number and kind of securities
or other property (including cash) subject to this Award.
7. Subject
to Plan.
The
Award
and the Award Shares or Adjusted Award Shares granted pursuant to this Agreement
have been granted under, and are subject to the terms of, the Plan. Terms
of the
Plan are incorporated by reference in this Agreement in their entirety, and
the
Grantee, by execution hereof, acknowledges having received a copy of the
Plan.
The provisions of this Agreement will be interpreted as to be consistent
with
the Plan, and any ambiguities in this Agreement will be
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interpreted
by reference to the Plan. In the event that any provision of this Agreement
is
inconsistent with the terms of the Plan, the terms of the Plan will
prevail.
8. Miscellaneous.
8.1 Binding
Effect.
This
Agreement will be binding upon the heirs, executors, administrators and
successors of the parties to this Agreement.
8.2 Governing
Law.
This
Agreement and all rights and obligations under this Agreement will be construed
in accordance with the Plan and governed by the laws of the State of Minnesota,
without regard to conflicts of laws provisions. Any legal proceeding related
to
this Agreement will be brought in an appropriate Minnesota court, and the
parties to this Agreement consent to the exclusive jurisdiction of the court
for
this purpose.
8.3 Entire
Agreement.
This
Agreement and the Plan set forth the entire agreement and understanding of
the
parties to this Agreement with respect to the grant and vesting of this Award
and the administration of the Plan and supersede all prior agreements,
arrangements, plans and understandings relating to the grant and vesting
of this
Award and the administration of the Plan.
8.4 Amendment
and Waiver.
Other
than as provided in the Plan, this Agreement may be amended, waived, modified
or
canceled only by a written instrument executed by the parties to this Agreement
or, in the case of a waiver, by the party waiving compliance.
The
parties hereto have executed this Agreement effective the day and year first
above written.
| SELECT COMFORT CORPORATION | |
|
/s/ Xxxxxxx X.
XxXxxxxxxx
|
|
| Xxxxxxx X. XxXxxxxxxx | |
| Chairman and Chief Executive Officer |
| By execution of this Agreement, the Grantee acknowledges having received a copy of the Plan. | GRANTEE |
| (Signature) | |
| (Name and Address) | |
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