SERIES 1 CLASS A UNIT AWARD AGREEMENT UNDER THE FIF HE HOLDINGS LLC FIFTH AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT
Exhibit 10.12
SERIES 1 CLASS A UNIT AWARD AGREEMENT
UNDER THE FIF HE HOLDINGS LLC
FIFTH AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
UNDER THE FIF HE HOLDINGS LLC
FIFTH AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
This Award Agreement (this “Agreement”), dated as of [ ] (the “Grant Date”),
is made by and between FIF HE Holdings LLC (the “Company”) and [ ] (the
“Participant”).
WHEREAS, the Company has adopted the FIF HE Holdings LLC Fifth Amended and Restated Limited
Liability Company Agreement, dated as of [ ] (the “LLC Agreement”), which is incorporated
herein by reference and made a part of this Agreement. Capitalized terms not otherwise defined
herein shall have the same meanings as in the LLC Agreement; and
WHEREAS, the Company has determined that it would be in the best interests of the Company and
its members to grant the Series 1 Class A Units (the “Units”) provided for herein to the
Participant pursuant to this Agreement and the LLC Agreement.
NOW THEREFORE, in consideration of the mutual covenants hereinafter set forth, the parties
agree as follows:
1. Award of Units. Subject to the terms and conditions hereof, the Company hereby
grants to the Participant [ ] Units (the “Award”), and the Participant hereby accepts the
grant of such Units from the Company. For the avoidance of doubt, the Participant shall not be
required to make a capital contribution with respect to the Units granted hereunder.
2. Vesting.
(a) General. Subject to the provisions set forth in this Section 2, the Units granted
to the Participant hereunder shall vest as follows:
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subject in each case to the continued Employment of the Participant from the date hereof through
the relevant “Vesting Date” set forth above, and provided that the Participant has not given or
received notice of termination of Employment, as of each such Vesting Date.
(b) Following Certain Terminations of Employment. Subject to the provisions of this
Section 2(b), upon termination of the Participant’s Employment for any reason, any Units which have
not vested pursuant to the terms of Section 2(a) shall be immediately forfeited by the Participant
and transferred to, and reacquired by, the Company without consideration of any kind and neither
the Participant nor any of the Participant’s successors, heirs, assigns, or personal
representatives shall thereafter have any further rights or interests in such Units. Except as
otherwise provided in Section 3 hereof, the treatment of vested Units upon a termination of the
Participant’s Employment shall be as set forth in the LLC Agreement. Notwithstanding the
foregoing:
(i) Upon an involuntary termination of the Participant’s Employment without Cause during the
six (6) month period following the occurrence of a Change in Control, 100% of the unvested Units
shall immediately become vested.
(ii) Upon an involuntary termination of the Participant’s Employment without Cause either (A)
prior to the occurrence of a Change in Control or (B) more than six (6) months following the
occurrence of a Change in Control, the number of Units that would have vested on the next scheduled
vesting date (if any) pursuant to the schedule set forth in Section 2(a) shall immediately become
vested.
(iii) Upon a termination of the Participant’s Employment either by the Participant for Good
Reason or as a result of the death or Disability of the Participant, the number of Units that would
have vested on the next scheduled vesting date (if any) pursuant to the schedule set forth in
Section 2(a) shall immediately become vested.
(c) Conversion of Company; Qualified Public Offering. Upon a conversion of the
Company as set forth in Section 16.1 of the LLC Agreement, each Unit shall be subject to the terms
of Section 16.1(a) of the LLC Agreement. Upon the consummation of a Qualified Public Offering, a
proportion of the unvested shares into which such Units were converted pursuant to the immediately
preceding sentence equal to the proportion of Units that would have vested on the next scheduled
vesting date (if any) pursuant to the schedule set forth in Section 2(a) shall immediately become
vested and shall be delivered to the Participant within sixty (60) days after the consummation of
the Qualified Public Offering. The remaining unvested shares (if any) shall remain subject to
their terms as in effect immediately prior to the conversion.
(d) Change in Control. For purposes of this Agreement, “Change in Control” shall
mean: (i) any sale or other disposition of all or substantially all of the assets of the Company
(including without limitation by way of a merger or consolidation or through the sale of all or
substantially all of the stock or equity of the Subsidiaries or sale of all or substantially all of
the assets of the Company and the Subsidiaries, taken as a whole) to another person other than an
Affiliate of Fortress Investment Group LLC if, immediately after giving effect thereto, any Person
(or group of Persons acting in concert), other than the Persons owning a majority of the Class A
Units (or other voting power of the Company) prior to such sale (together with their Affiliates),
will have the power to elect the Company Manager (or other similar governing Person(s) or body) of
the purchaser or surviving company; or (ii) any change in the ownership of the capital or equity of
the Company if, immediately after giving effect thereto, the persons owning a majority of the Class
A Units (or other voting power of the Company) prior to such change (together with their
Affiliates) shall own, in the aggregate, less than 50% of the equity interests of the Company.
3. Treatment of Vested Series 1 Class A Units Upon Termination of Employment.
Notwithstanding anything set forth to the contrary in Sections 9.11.3 and 9.11.4 of the LLC
Agreement, if the Repurchase Rights are exercised by the applicable Series upon the termination of
the Participant’s Employment, the Participant shall receive, no later than ninety (90) days
following the date on which the Repurchase Rights are exercised, an amount per each vested Series 1
Class A Unit held by the Participant, whether granted pursuant to this Agreement or
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otherwise, and including, for the avoidance of doubt, any applicable Purchased Units and
Company Match Class A Units (each such Series 1 Class A Unit, a “Management Unit”), equal
to the Fair Market Value of a Class A Unit as of the date of termination; provided, however, that
if the Participant’s Employment is terminated for Cause, the amount per each Management Unit shall
instead be equal to the lesser of (i) the Fair Market Value of a Class A Unit as of the date of
termination and (ii) the Fair Market Value of a Class A Unit as of the Grant Date. Notwithstanding
anything set forth to the contrary in Section 9.11.5 of the LLC Agreement, the Participant shall
not have the right to elect to require a Series to exercise its Repurchase Rights with respect to
the Management Units upon any termination of the Participant’s Employment.
4. Certain Covenants. By executing this Agreement, the Participant agrees to comply
with all applicable restrictive covenants contained in any agreement between the Company and the
Participant (the “Restrictive Covenants”) and acknowledges that the Participant’s
obligations with respect to the Restrictive Covenants constitutes a material inducement for the
Company’s grant of the Award to the Participant.
5. No Right to Continued Employment. The granting of the Award evidenced hereby and
this Agreement shall impose no obligation on the Company to continue the Employment of the
Participant and shall not lessen or affect the Company’s right to terminate the Employment of the
Participant.
6. Notices. Any notices provided hereunder must be in writing and shall be deemed
effective one (1) business day following personal delivery (including personal delivery by
facsimile and confirmation of receipt) or overnight delivery by a courier of national reputation to
the recipient at the address indicated below:
To the Company:
FIF HE Holdings LLC
c/o Fortress Investment Group LLC
0000 Xxxxxx xx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Facsimile: 212.798.6120
c/o Fortress Investment Group LLC
0000 Xxxxxx xx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Facsimile: 212.798.6120
With a copy, which shall not constitute notice, to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxx
Facsimile: 917.777.3963
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxx
Facsimile: 917.777.3963
To the Participant:
[ ]
Facsimile: [_______]
Facsimile: [_______]
or to such other address or facsimile number or to the attention of such other person as the
recipient party will have specified by prior written notice to the sending party.
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7. Governing Law. This Agreement and all claims arising out of or based upon this
Agreement or relating to the subject matter hereof shall be governed by and construed in accordance
with the domestic substantive laws of the State of Delaware without giving effect to any choice or
conflict of laws provision or rule that would cause the application of the domestic substantive
laws of any other jurisdiction.
8. Arbitration. Except as necessary for the Company and its successors or assigns or
the Participant to specifically enforce or enjoin a breach of this Agreement (to the extent such
remedies are otherwise available), the parties agree that any and all disputes that may arise in
connection with, arising out of or relating to this Agreement shall be submitted to binding
arbitration in Dallas, Texas according to the National Employment Dispute Resolution Rules and
procedures of the American Arbitration Association. The parties agree that the prevailing party in
any such dispute shall be entitled to reasonable attorneys’ fees, costs, and necessary
disbursements in addition to any other relief to which he or it may be entitled.
9. Specific Performance. The Participant acknowledges and agrees that the Company’s
remedies at law for a breach or threatened breach of the Restrictive Covenants would be inadequate
and the Company would suffer irreparable damages as a result of such breach or threatened beach.
In recognition of this fact, the Participant agrees that, in the event of such a breach or
threatened breach, in addition to any remedies at law, the Company, without posting any bond or
needing to prove the inadequacy of monetary damages, shall be entitled to cease making any payments
or providing any benefit otherwise required by this Agreement and obtain equitable relief in the
form of specific performance, temporary restraining order, temporary or permanent injunction or any
other equitable remedy which may then be available.
10. Tax Issues. THE ISSUANCE OF THE SUBJECT UNITS TO THE PARTICIPANT PURSUANT TO THIS
AGREEMENT INVOLVES COMPLEX AND SUBSTANTIAL TAX CONSIDERATIONS, INCLUDING, WITHOUT LIMITATION,
CONSIDERATION OF THE ADVISABILITY OF THE PARTICIPANT MAKING AN ELECTION UNDER SECTION 83(b) OF THE
CODE. THE PARTICIPANT ACKNOWLEDGES THAT HE HAS CONSULTED HIS OWN TAX ADVISOR WITH RESPECT TO THE
TRANSACTIONS DESCRIBED IN THIS AGREEMENT. THE COMPANY MAKES NO WARRANTIES OR REPRESENTATIONS
WHATSOEVER TO THE PARTICIPANT REGARDING THE TAX CONSEQUENCES OF THE GRANT OF THE UNITS SUBJECT TO
THIS AWARD OR THIS AGREEMENT. THE PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE PARTICIPANT
SHALL BE SOLELY RESPONSIBLE FOR ANY TAXES ON THE SUBJECT UNITS AND SHALL HOLD THE COMPANY, AND ALL
OFFICERS, DIRECTORS, EMPLOYEES, AGENTS AND ADVISORS OF THE COMPANY HARMLESS FROM ANY LIABILITY
ARISING FROM ANY TAXES INCURRED BY THE PARTICIPANT IN CONNECTION WITH THE UNITS SUBJECT TO THE
AWARD AND THIS AGREEMENT.
11. Tax Withholding. Upon vesting of the Units granted hereunder, the Participant
shall pay to the Company an amount equal to the taxes the Company determines it is required to
withhold at the lowest applicable rate determined by the Company under applicable tax laws with
respect to the Units. The Participant may satisfy the foregoing requirement by making a payment to
the Company in cash or by electing to have the Company withhold Units from delivery or by
delivering already owned unrestricted Units to the Company, in each case, such Units having a value
equal to, or less than, the minimum amount of tax required to be withheld, and paying any
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balance of the amount required to satisfy withholding requirements in cash. Such Units shall
be valued at their Fair Market Value on the date as of which the amount of tax to be withheld is
determined.
12. Award Subject to this Agreement and the LLC Agreement. By entering into this
Agreement the Participant agrees and acknowledges that the Participant has received and read this
Agreement and a copy of the LLC Agreement. The Award is subject to the LLC Agreement, as it may be
amended from time to time, and the terms and provisions of the LLC Agreement are hereby
incorporated herein by reference. The Participant agrees to be bound by the terms and provisions
of the LLC Agreement.
13. Waivers and Amendments. The respective rights and obligations of the Company and
the Participant under this Agreement may be waived (either generally or in a particular instance,
either retroactively or prospectively, and either for a specified period of time or indefinitely)
by such respective party. This Agreement may be amended only with the written consent of a duly
authorized representative of the Company and the Participant.
14. Certificates. All certificates, if any, evidencing Units or other securities of
the Company delivered under this Agreement shall be subject to such stop transfer orders and other
restrictions as the Company may deem advisable under this Agreement or the rules, regulations, and
other requirements of the Securities and Exchange Commission, any stock exchange upon which such
securities are then listed, and any applicable Federal or state laws, and the Company may cause a
legend or legends to be put on any such certificates to make appropriate reference to such
restrictions.
15. Severability. If any provision of this Agreement is or becomes or is deemed to be
invalid, illegal, or unenforceable in any jurisdiction or as to any Person or Award, or would
disqualify this Agreement or any Award under any law deemed applicable by the Company, such
provision shall be construed or deemed amended to conform to such applicable laws, or if it cannot
be construed or deemed amended without, in the determination of the Company, materially altering
the intent of this Agreement or the Award, such provision shall be stricken as to such
jurisdiction, Person or Award and the remainder of this Agreement and any such Award shall remain
in full force and effect.
16. Successors and Assigns. Except as otherwise expressly provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon, the successors, assigns,
heirs, executors and administrators of the parties hereto. Except as otherwise set forth in the
LLC Agreement with respect to vested Units, the Participant may not assign any rights or
obligations that the Participant may have with respect to the Units granted hereunder.
17. Signature in Counterparts. This Agreement may be signed in counterparts, each of
which shall be an original, with the same effect as if the signatures thereto and hereto were upon
the same instrument.
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IN WITNESS WHEREOF AND INTENDING TO BE LEGALLY BOUND THEREOF, the parties hereto have executed
and delivered this Agreement as of the year and date first above written.
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