RESTRICTED STOCK AGREEMENT
Exhibit 10.3
RESTRICTED STOCK AGREEMENT
THIS RESTRICTED STOCK AGREEMENT (this “Agreement”), effective September 22, 2021 (the “Distribution Date”), is entered into by and among Sovos Brands, Inc., a Delaware corporation (the “Company”), Sovos Brands Limited Partnership, a Delaware limited partnership (the “Partnership”), and Xxxx X. Xxxxxx (the “Participant”).
R E C I T A L S
WHEREAS, the Partnership holds Common Stock, par value $0.001 per share, of the Company (the “Shares”);
WHEREAS, as of the Distribution Date, the Participant holds Incentive Units of the Partnership that were granted pursuant to the terms of (i) an Incentive Unit Grant Agreement, dated June 4, 2018, and (ii) an Incentive Unit Grant Agreement, dated May 1, 2019, between the Participant and the Partnership (as each such agreement was amended effective as of September 8, 2021, the “Incentive Unit Grant Agreement”); and
WHEREAS, the Partnership wishes to distribute to the Participant the number of Shares set forth below, subject to certain restrictions as set forth in this Agreement.
NOW, THEREFORE, the Partnership, the Company and the Participant agree as follows:
(i) | 6,008 Shares of Restricted Stock shall vest in three (3) substantially equal quarterly installments, with the first vesting date occurring on November 14, 2021, subject to the Participant’s continuous employment with the Company or one of its Subsidiaries on the applicable vesting date. |
(ii) | 2,854 Shares of Restricted Stock shall vest in five (5) substantially equal quarterly installments, with the first vesting date occurring on |
November 20, 2021, subject to the Participant’s continuous employment with the Company or one of its Subsidiaries on the applicable vesting date.
(iii) | In the event of a Change in Control, the Shares of Restricted Stock that are eligible to vest pursuant to this Section 2(a) shall become fully vested immediately prior to the Change in Control, subject to the Participant’s continuous employment with the Company or one of its Subsidiaries at such time, and cease to be Restricted Stock. |
(i) | 33,856 Shares of Restricted Stock (the “Tranche 1 Performance Shares”) shall vest on any Measurement Date on which the Advent Group achieves a MOIC equal to at least two (2), subject to the Participant's continuous employment with the Company or one of its Subsidiaries through such Measurement Date. For the avoidance of doubt, the Tranche 1 Performance Units shall not vest if the Advent Group receives Advent Cash Amounts resulting in a MOIC of less than two (2). |
(ii) | 36,076 Shares of Restricted Stock (the “Tranche 2 Performance Shares”) shall vest on the basis of linear interpolation between the Advent Group’s achievement of a MOIC of two (2) and two and one-half (2.5) on any Measurement Date, subject to the Participant's continuous employment with the Company or one of its Subsidiaries through such Measurement Date. For the avoidance of doubt, one-hundred percent (100%) of the Tranche 2 Performance Shares shall vest if the Advent Group receives Advent Cash Amounts resulting in a MOIC of at least two and one-half (2.5). |
(iii) | 48,083 Shares of Restricted Stock (the “Tranche 3 Performance Shares”) shall vest on the basis of linear interpolation between the Advent Group’s achievement of a MOIC of two and one-half (2.5) and three (3) on any Measurement Date, subject to the Participant's continuous employment with the Company or one of its Subsidiaries through such Measurement Date. For the avoidance of doubt, one-hundred percent (100%) of the Tranche 3 Performance Shares shall vest if the Advent Group receives Advent Cash Amounts resulting in a MOIC of at least three (3). |
(iv) | 48,111 Shares of Restricted Stock (the “Tranche 4 Performance Shares”) shall vest on the basis of linear interpolation between the Advent Group’s achievement of a MOIC of three (3) and four (4) on any Measurement Date, subject to the Participant's continuous employment with the Company or one of its Subsidiaries through such |
Measurement Date. For the avoidance of doubt, one-hundred percent (100%) of the Tranche 4 Performance Shares shall vest if the Advent Group receives Advent Cash Amounts resulting in a MOIC of at least four (4).
(v) | Any Performance Vesting Shares that have not vested in connection with a Change in Control (after taking into account Performance Vesting Shares that vest in connection with such Change in Control) shall be forfeited, transferred and contributed to the Partnership for no consideration following such Change in Control. |
(vi) | Calculation of MOIC. The Advent Group’s MOIC shall be determined in accordance with the terms of the Incentive Unit Grant Agreement, including Section 2.3(b)(vi). For the avoidance of doubt, the determination of the Advent Group’s MOIC for the purpose of determining vesting of Restricted Stock shall in all events be consistent with the determination of the Advent Group’s MOIC for the purpose of determining the vesting of Incentive Units under the Incentive Unit Grant Agreement. |
c. | Deemed Sale Events. |
(i) | To the extent the Tranche 1 Performance Shares remain unvested as of the thirtieth (30th) trading day following the Effective Date, such date shall be deemed to be a Measurement Date and the Advent Group shall be deemed to sell for cash all of the Shares then held by the Advent Group at the volume-weighted average price of the Shares during the thirty (30) consecutive trading days immediately following the Effective Date (including, for the avoidance of doubt, the Effective Date). The Tranche 1 Performance Shares shall vest to the extent that the Advent Group achieves a MOIC of at least two (2.0) on such Measurement Date (including, for the avoidance of doubt, all Shares deemed to be sold for cash and all prior receipts of Advent Cash Amounts). If the Advent Group does not achieve a MOIC of at least two (2.0) on such Measurement Date, the Tranche 1 Performance Shares will remain outstanding and eligible to vest in accordance with Section 2(b) and Section 2(c). |
(ii) | On the earlier of (x) the thirty-month anniversary of the Effective Date and (y) the first date on which the Advent Group ceases to hold Shares representing at least twenty-five percent (25%) of the number of equity securities of the Partnership held by the Advent Group immediately prior to the Effective Date (taking into account adjustments for changes in capital structure) ((x) or (y) as applicable shall be a Measurement Date), the Advent Group shall be deemed to sell for cash all of the Shares then held by the Advent Group at the volume-weighted average price of the Shares during the thirty (30) consecutive |
trading days immediately preceding such date, as applicable (a “Deemed Sale”); provided, that the Participant may elect to waive the Measurement Date described in (x) above by providing written notice to the General Partner at any time within the thirty days prior to thirty-month anniversary of the Effective Date in which event only the Measurement Date in (y) above shall apply and be a Deemed Sale with respect to such Participant. All Performance Vesting Shares shall vest on such Deemed Sale to the extent the performance conditions are satisfied and all Performance Vesting Shares that do not vest on such Deemed Sale shall be forfeited, transferred and contributed to the Partnership for no consideration immediately upon such Deemed Sale. For the avoidance of doubt, no Performance Vesting Shares shall be forfeited on or in connection with a Measurement Date that is not a Deemed Sale or a Change in Control.
“THE ANTICIPATION, ALIENATION, ATTACHMENT, SALE, TRANSFER, ASSIGNMENT, PLEDGE, ENCUMBRANCE OR CHARGE OF THE SHARES OF COMMON STOCK REPRESENTED HEREBY ARE SUBJECT TO THE TERMS AND CONDITIONS AN AGREEMENT ENTERED INTO BETWEEN THE REGISTERED OWNER, THE PARTNERSHIP AND THE COMPANY EFFECTIVE AS OF THE DISTRIBUTION DATE. COPIES OF SUCH AGREEMENT ARE ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY.”
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE. SUCH SECURITIES MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED WITHOUT SUCH REGISTRATION, EXCEPT UPON DELIVERY TO THE COMPANY OF SUCH EVIDENCE AS MAYBE SATISFACTORY TO COUNSEL FOR THE COMPANY TO THE EFFECT THAT ANY SUCH TRANSFER SHALL NOT BE IN VIOLATION OF THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS OR ANY RULE OR REGULATION PROMULGATED THEREUNDER."
Any legend required to be placed thereon by applicable blue sky laws of any state. Notwithstanding the foregoing, in no event shall the Company be obligated to issue a certificate representing the Restricted Stock prior to vesting as set forth in Section 2 hereof.
12.Provisions of Plan Control. Although the Restricted Stock subject to this Agreement is not granted under the Plan and the Shares are not registered on a Form S-8, except as expressly provided herein, the Agreement is subject to all the terms, conditions and provisions of the Plan mutatis mutandis, including, without limitation, Section 16.2 (Amendment and Termination) thereof, and to such rules, regulations and interpretations relating to the Plan as may be adopted by the Committee and as may be in effect from time to time. Notwithstanding the foregoing, this Agreement may not be amended or terminated without the prior written consent of the Participant. The Plan is incorporated herein by reference. A copy of the Plan has been delivered to the Participant. If and to the extent that this Agreement expressly conflicts with the terms, conditions and provisions of the Plan, this Agreement shall control. Unless otherwise indicated, any capitalized term used but not defined herein shall have the meaning ascribed to such term in the Plan or the Incentive Unit Grant Agreement, as applicable. This Agreement contains the entire understanding of the parties with respect to the subject matter hereof (other than any other documents expressly contemplated herein or in the Plan) and supersedes any prior agreements between the Company and the Participant or between the Partnership and the Participant other than the Incentive Unit Grant Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written.
/s/ Xxxx Xxxxxxx
By: Xxxx Xxxxxxx
Title: President and CEO
Sovos Brands Limited Partnership
/s/ Xxxx Xxxxxxx
By: Xxxx Xxxxxxx
Title: Authorized Signatory
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written.
Participant
/s/ Xxxx Xxxxxx
Name: Xxxx Xxxxxx
