EDDIE BAUER HOLDINGS, INC. STOCK ONLY STOCK APPRECIATION RIGHT AGREEMENT
Exhibit 10.1
XXXXX XXXXX HOLDINGS, INC.
STOCK ONLY STOCK APPRECIATION RIGHT AGREEMENT
STOCK ONLY STOCK APPRECIATION RIGHT AGREEMENT
This Stock Only Stock Appreciation Right Agreement (this “Agreement”), is made and
entered into as of (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. Capitalized terms used herein shall have the definitions as provided herein or in the 2007
Amendment and Restatement of the Xxxxx Xxxxx Holdings, Inc. 2005 Stock Incentive Plan.
AGREEMENT
In consideration of the covenants and promises contained herein and other good and valuable
consideration, the sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Grant.
(a) The Company hereby grants to Grantee stock only stock appreciation rights
(“SOSAR”) at an exercise price of $ under and subject to the 2007 Amendment and
Restatement of the Xxxxx Xxxxx Holdings, Inc. 2005 Stock Incentive Plan (the “Plan”). The SOSAR is
the right to receive a number of shares of the Company’s Common Stock determined by taking the
difference between (x) the closing price of the Common Stock on the Date of Grant multiplied by the
number of SOSARs, and (y) the closing price of the Common Stock on the date of exercise, multiplied
by the number of SOSARs. The Grantee will receive a number of shares of the Common Stock equal to
the difference between the two amounts [(x) and (y) above], divided by the closing price of the
Common Stock on the date of exercise. This SOSAR is not intended to qualify as an “incentive stock
option” within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
“Code”).
(b) The Company shall, in accordance with the Plan, establish and maintain a stock account for
the Grantee, and such account shall be credited for the number of SOSARs granted to the Grantee.
The stock 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 SOSARs to which they relate.
(c) Until the SOSARs awarded to the Grantee shall have vested and become payable as specified
in this Agreement, the SOSARs and any related securities, cash dividends or other property
nominally credited to a Stock account may not be sold, transferred, or otherwise disposed of and
may not be pledged or otherwise hypothecated.
2. Exercise Period; Vesting. Unless expired as provided in Section 3 or terminated as
provided in Section 4 of this Agreement, this SOSAR may be exercised from time to time after the
Date of Grant set forth above to the extent the SOSAR has vested in accordance with the vesting
schedule set forth below. The shares of Common Stock (the “Shares”) issued upon exercise of the
SOSAR will be subject to the restrictions on transfer set forth in Section 9 below. Provided
Grantee continues to provide continuous services as an employee, director or consultant
(“Continuous Service”) to the Company or any affiliate, the SOSAR will become vested as follows:
| Percentage of | ||||
| Vesting Date | Shares Vested | |||
1st Anniversary |
25 | % | ||
2nd Anniversary |
50 | % | ||
3rd Anniversary |
75 | % | ||
4th Anniversary |
100 | % | ||
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A vested SOSAR may not be exercised for less than a full Share. If application of the vesting
percentage causes a fractional Share to otherwise become exercisable, such Share shall be rounded
down to the nearest whole Share for each year except for the last year in such vesting period, at
the end of which vesting period the SOSAR shall become exercisable for the full remainder of the
unexercised Shares subject to the SOSAR. Upon the occurrence of a Change in Control, upon
retirement on or after age 65 and in the event of death or Disability, the SOSAR shall become 100%
vested and exercisable. Except as otherwise provided in this Section, if the Grantee ceases
Continuous Service for any other reason, the unvested portion of the SOSAR shall be forfeited
immediately.
3. Expiration. The SOSAR shall expire on (the “Expiration Date”) or earlier
as provided in Section 4 below. It is the responsibility of the Grantee to exercise his/her rights
under this Agreement prior to the expiration date.
4. Termination of Continuous Service.
(a) Termination for Cause. If the Grantee’s Continuous Service is terminated for
Cause, all outstanding SOSARs granted to such Grantee shall be forfeited and expire as of the
beginning of business on the date of such termination of Continuous Service. The Administrator, in
its absolute discretion, shall determine the effect of all matters and questions relating to
whether Grantee has been discharged for Cause.
(b) Termination for Any Reason (other than For Cause) Including Retirement at or after Age
55 with at least 10 Years of Service If Grantee’s Continuous Service is terminated for any
reason other than Cause, including Retirement at or after age 55 with at least 10 years of service,
the unvested portion of the SOSAR shall be forfeited and expire at the close of business on the
date of such termination. The SOSAR, to the extent (and only to the extent) that it would have
been exercisable by Grantee immediately prior to such termination of Continuous Service, may be
exercised by Grantee until the earlier of the Expiration Date or the date that is three months
following the termination of the Grantee’s Continuous Service and the SOSAR shall thereafter
terminate and cease to be exercisable.
(c) Termination Because of Retirement on or after Age 65, Death or Disability. Upon
Retirement on or after age 65, death or Disability of the Grantee, the SOSAR shall become 100%
vested. If Grantee’s Continuous Service is terminated because of Retirement on or after age 65,
death or Disability of Grantee, the SOSAR, to the extent exercisable by Grantee on the date of
termination, may be exercised by Grantee (or Grantee’s legal representative) no later than 12
months after the date of termination, but in any event no later than the Expiration Date.
(d) Termination Under Change in Control. If the Grantee’s Continuous Service is
terminated as a result of a Change in Control, the SOSAR shall become 100% vested. The SOSAR, to
the extent (and only to the extent) that it would have been exercisable by Grantee immediately
prior to such termination of Continuous Service, may be exercised by Grantee until the earlier of
the Expiration Date or the date that is three months following the termination of the Grantee’s
Continuous Service and the SOSAR shall thereafter terminate and cease to be exercisable.
(e) Extension of Termination Date. If the exercise of the SOSAR following the
termination of the Grantee’s Continuous Service (other than upon the Grantee’s Retirement on or
after age 65, death or Disability) would be prohibited at any time solely because the exercise of
the SOSAR or issuance of Shares of Common Stock would violate the registration requirements under
the Securities Act or any other state or federal securities law requirement, then the SOSARs shall
terminate on the earlier of (a) the Expiration Date, or (b) the expiration of a period after
termination of the Grantee’s Continuous Service that is three months after the end of the period
during which the exercise of the SOSAR would be in violation of such registration or other
securities law requirements.
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(f) No Obligation to Employ. Nothing in the Plan or this Agreement shall confer on
Grantee any right to continue in the employ of, or other relationship with, the Company or any
affiliate, or limit in any way the right of the Company or any affiliate to terminate Grantee’s
employment or other relationship at any time, with or without Cause.
5. Manner of Exercise.
(a) Stock Only Stock Appreciation Right Exercise Notice and Representations. To
exercise this SOSAR, Grantee (or in the case of exercise after Grantee’s death or incapacity,
Grantee’s executor, administrator, heir or legatee, as the case may be) must deliver to the Company
an executed Stock Only Stock Appreciation Right Exercise Notice and Representations in the form
attached hereto as Exhibit A, or in such other form as may be approved by the Administrator
from time to time (the “Exercise Notice”), which shall include the following: (i) Grantee’s
election to exercise the SOSAR, (ii) the number of SOSARs exercised (iii) the date of grant of such
SOSARs; provided, however, if no date of grant is specified, the earliest granted, vested and
exercisable SOSAR will be subject to the Exercise Notice; (iv) the account information for book
entry of the Shares to Grantee’s account; and (v) any representations warranties and agreements
regarding Grantee’s investment intent and access to information as may be required by the Company
to comply with applicable securities laws. Grantee shall not exercise SOSARs during a blackout
period to the extent prohibited by the Company’s Xxxxxxx Xxxxxxx Policy. The Administrator shall
have three business days after the date of receipt of the Exercise Notice to complete the book
entry of the Shares. If someone other than Grantee exercises the SOSARs, then such person must
submit documentation reasonably acceptable to the Company verifying that such person has the legal
right to exercise the SOSAR.
(b) Limitations on Exercise. The SOSAR may not be exercised unless such exercise is
in compliance with all applicable federal and state securities laws, as they are in effect on the
date of exercise. The SOSAR may not be exercised for less than one Share or for a fractional
Share. If a fractional Share would otherwise become exercisable, such Share shall be rounded down
to the nearest whole Share for each year except for the last year of the applicable vesting period,
at the end of which vesting period this SOSAR shall become exercisable for the full remainder of
the unexercised Shares subject to the SOSAR.
(c) Payment. All payments made under this Agreement shall be in Shares of Common
Stock of the Company determined as provided in Section 1(a), above. The Administrator shall have
three business days after the date of receipt of the Exercise Notice to complete the book entry of
the Shares.
(d) Tax Withholding. Prior to the payment of Shares upon exercise of the SOSAR,
Grantee must pay or provide for the payment of any applicable federal, state and local withholding
obligations of the Company. If the Administrator permits, Grantee also may provide for payment of
withholding taxes upon exercise of the SOSAR by one or more of the following means, or combination
thereof: (i) tendering a cash payment; (ii) (ii) tendering previously acquired shares of Common
Stock with a fair market value, as determined by the Administrator in a manner consistent with the
Plan, equal to or less than the minimum statutory amount of taxes required to be withheld by law,
or (iv) by requesting that the Company retain Shares from the Shares otherwise issuable to the
Grantee as a result of the exercise of this SOSAR, provided that no Shares are withheld with a fair
market value, as determined by the Administrator in a manner consistent with the Plan, exceeding
the minimum statutory amount of taxes required to be withheld by law (“Share Withholding”). In
such case, the Company shall issue the net number of Shares to the Grantee by deducting the Shares
retained from the Shares issuable upon exercise. Payment of the tax withholding by a Grantee who
is an officer, director or other “insider” subject to Section 16(b) of the Exchange Act by a tender
of Common Stock or in the form of Share Withholding is subject to pre-approval by the
Administrator, in its sole discretion, in a manner that complies with the specificity requirements
of Rule 16b-3 under the Exchange Act, including the name of the Grantee involved in the
transaction, the nature of the transaction, the number of shares to be acquired or disposed of by
the Grantee and the material terms of the SOSARs involved in the transaction.
(e) Issuance of Shares. Provided that the Exercise Notice and circumstances are in
form and substance satisfactory to counsel for the Company, the Company shall issue the Shares
registered in the name of Grantee, Grantee’s authorized assignee, or Grantee’s legal
representative, and shall deliver by book entry or otherwise the certificates representing the
Shares with the appropriate legends affixed thereto.
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6. Compliance with Laws and Regulations. The issuance of Common Stock upon exercise of the
SOSAR 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 SOSAR or the
issuance of Common Stock on exercise 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.
7. Nontransferability of Stock Only Stock Appreciation Right. Except as provided herein, this
SOSAR may not be transferred in any manner other than by will or by the laws of descent and
distribution and may be exercised during the lifetime of Grantee only by Grantee or in the event of
Grantee’s incapacity, by Grantee’s legal representative. The terms of the SOSAR shall be binding
upon the executors, administrators, successors and assigns of Grantee. This SOSAR may be
transferred by domestic relations order.
8. Privileges of Stock Ownership. Grantee shall not have any of the rights of a Stockholder
with respect to any Shares until the Shares are issued to Grantee.
9. Restrictions On Transfer.
(a) Securities Law Restrictions. Regardless of whether the offering and sale of
Shares under the Plan 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 Shares (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.
(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 Grantee 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 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 Shares 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 Shares subject
to the Market Stand-Off, or into which such Shares thereby become convertible, shall immediately be
subject to the Market Stand-Off.
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10. 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.
11. Acceptance. Grantee hereby acknowledges receipt of a copy of this Agreement. Grantee has
read and understands the terms and provisions thereof, and accepts the SOSAR subject to all the
terms and conditions of this Agreement. Grantee acknowledges that there may be adverse tax
consequences upon exercise of the SOSAR or disposition of the Shares and that Grantee should
consult a tax advisor prior to such exercise or disposition.
12. Section 409A Limitation. In the event the Administrator determines at any time that this
SOSAR has been granted with an exercise price less than Fair Market Value of the Shares subject to
the SOSAR on the date the SOSAR is granted (regardless of whether or not such exercise price is
intentionally or unintentionally priced at less than Fair Market Value, or is materially modified
at a time when the Fair Market Value exceeds the exercise price), or is otherwise determined to
constitute “nonqualified deferred compensation” within the meaning of Section 409A of the Code,
notwithstanding any provision of the Plan or this SOSAR Agreement to the contrary, the SOSAR shall
satisfy the additional conditions applicable to nonqualified deferred compensation under Section
409A of the Code, in accordance with Section 8 of the Plan. The specified exercise date and term
shall be the default date and term specified in Section 8 of the Plan. Notwithstanding the
foregoing, the Company shall have no liability to Grantee or any other person if an SOSAR is
determined to constitute “nonqualified deferred compensation” within the meaning of Section 409A of
the Code and the terms of such SOSAR do not satisfy the additional conditions applicable to
nonqualified deferred compensation under Section 409A of the Code and Section 8 of the Plan.
13. No Right to Future Awards. This XXXXX xxxxx is discretionary. This Agreement does not
confer on Grantee any right or entitlement to receive another XXXXX xxxxx or any other equity-based
award at any time in the future or in respect of any future period.
14. 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 exercise
of the SOSAR or disposition of the shares 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:
(i) The Grantee is acquiring the shares of Common Stock for his own account for investment
purposes only and not with a view towards distribution.
(ii) 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.
(iii) 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.
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(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.
15. 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 SOSAR 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.
16. Miscellaneous Terms.
(a) Notices. Any notice necessary under this Agreement shall be addressed to the
Company in care of its Manager of Compensation, with a copy to the Company’s General Counsel, at
the principal executive office of the Company at 00000 XX 0xx Xxxxxx, Xxxxx 000, 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 days after deposit in the United States mail by certified or registered mail (return
receipt requested); (c) two business day after deposit with any return receipt express courier
(prepaid); or (d) one 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.
(e) Interpretation. 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.
(f) Successors and Assigns. The Company may assign any of its rights under this
Agreement. This Agreement shall be binding upon and inure to the benefit of the successors and
assigns of the Company. Subject to the restrictions on transfer set forth herein, this Agreement
shall be binding upon Grantee and Grantee’s heirs, executors, administrators, legal
representatives, successors and assigns.
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(g) Governing Law. This Agreement shall be governed by and construed in accordance
with 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.
17. 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]
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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: |
||||||||||
| NAME, in his/ her individual capacity | ||||||||||
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EXHIBIT A
FORM OF STOCK ONLY STOCK APPRECIATION RIGHT EXERCISE NOTICE AND REPRESENTATIONS
FORM OF STOCK ONLY STOCK APPRECIATION RIGHT EXERCISE NOTICE AND REPRESENTATIONS
Date:
SOSAR EXERCISE NOTICE AND REPRESENTATIONS
Xxxxx Xxxxx Holdings, Inc.
00000 XX 0xx Xxxxxx
Xxxxxxxx, XX 00000
Attention: General Counsel
00000 XX 0xx Xxxxxx
Xxxxxxxx, XX 00000
Attention: General Counsel
Ladies and Gentlemen:
1. Stock Only Stock Appreciation Right. I was granted a Stock Only Stock Appreciation
Right (the “SOSAR”) to receive shares of the common stock (the “Shares”) of Xxxxx Xxxxx Holdings,
Inc., a Delaware corporation (the “Company”), pursuant to the terms of my individual Stock Only
Stock Appreciation Right Agreement (the “Stock Only Stock Appreciation Right Agreement”) as
follows:
Date of XXXXX Xxxxx:
Number of SOSARs:
2. Exercise of SOSAR. I hereby elect to exercise the following number of the above
identified SOSARs, all of which are vested in accordance with the Stock Only Stock Appreciation
Right Agreement, to receive shares:
Total Shares Received: |
||||
3. Tax Withholding. I authorize payroll withholding and otherwise will make adequate
provision for the federal, state, local and foreign tax withholding obligations of the Company, if
any, in connection with the SOSAR.
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4. Grantee Information.
My address is:
Account Information:
Bank or Broker’s Name: ______________________________________
Name of My Account: ________________________________________
My Account Number: ________________________________________
Routing Information: _________________________________________
Contact Name at bank or brokerage and contact information: __________
Name of My Account: ________________________________________
My Account Number: ________________________________________
Routing Information: _________________________________________
Contact Name at bank or brokerage and contact information: __________
My Social Security Number is:
5. Binding Effect. I agree that the Shares are being acquired in accordance with and
subject to the terms, provisions and conditions of the Stock Only Stock Appreciation Right
Agreement set forth therein, to all of which I hereby expressly assent. This Agreement shall inure
to the benefit of and be binding upon my heirs, executors, administrators, successors and assigns.
6. Transfer. I understand and acknowledge that the Shares have not been registered
under the Securities Act of 1933, as amended (the “Securities Act”), and that consequently the
Shares must be held indefinitely unless they are subsequently registered under the Securities Act,
an exemption from such registration is available, or they are sold in accordance with Rule 144
under the Securities Act. I further understand and acknowledge that the Company is under no
obligation to register the Shares. I understand that the certificate or certificates evidencing
the Shares will be imprinted with legends which prohibit the transfer of the Shares unless they are
registered or such registration is not required in the opinion of legal counsel satisfactory to the
Company. I am aware that Rule 144 under the Securities Act, which permits limited public resale of
securities acquired in a nonpublic offering, is not currently available with respect to the Shares
and, in any event, is available only if certain conditions are satisfied. I understand that any
sale of the Shares that might be made in reliance upon Rule 144 may only be made in limited amounts
in accordance with the terms and conditions of such rule and that a copy of Rule 144 will be
delivered to me upon request.
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I understand that I am purchasing the Shares pursuant to the terms of my Stock Only Stock
Appreciation Right Agreement, copies of which I have received and carefully read and understand.
| Very truly yours, | ||||
[Acknowledgement on next page]
Receipt of the above is hereby acknowledged.
Xxxxx Xxxxx Holdings, Inc.
By: |
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Name:
|
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Title:
|
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Dated: |
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