AMENDED AND RESTATED 2012 SHARE INCENTIVE PLAN
Exhibit 10.5
MEDIFAST, INC.
AMENDED AND RESTATED 2012 SHARE INCENTIVE PLAN
PERFORMANCE-BASED DEFERRED SHARE AWARD AGREEMENT
Medifast, Inc. (the “Company”) has determined to grant to you an award of deferred shares of common stock (“Award”) of the Company under the Medifast, Inc. Amended and Restated 2012 Share Incentive Plan (the “Plan”). The terms of the grant are set forth in the attached Performance-Based Deferred Share Award Agreement (the “Agreement”). The following provides a summary of the key terms of the Agreement; however, you should read the entire Agreement along with the terms of the Plan, to fully understand the Agreement.
SUMMARY OF PERFORMANCE-BASED DEFERRED
SHARE
AWARD AGREEMENT
Participant: | [ ] |
Date of Grant: | [________],[_______] |
Maximum Number of Deferred Shares | |
that may be Earned: | [_______] |
The above is a summary description of certain provisions of the Agreement and is not intended to be complete. In the event any aspect of this summary conflicts with the terms of the Agreement, the terms of the Agreement shall govern.
PERFORMANCE-BASED DEFERRED SHARE AWARD AGREEMENT
This PERFORMANCE-BASED DEFERRED SHARE AWARD AGREEMENT (the “Agreement”), dated as of [_________],[_______] (the “Date of Grant”) is delivered by Medifast, Inc. (the “Company”), to [______________] (the “Participant”).
The Company has determined to provide the Participant a deferred share award under the Medifast, Inc. Amended and Restated 2012 Share Incentive Plan (the “Plan”) and in accordance with the terms and conditions set forth in this Agreement. Capitalized terms that are used but not defined herein shall have the respective meanings accorded to such terms in the Plan.
The Company and Participant, intending to be legally bound hereby, agree as follows:
1. Grant of Deferred Share Award.
The Company grants to Participant [_______] Deferred Shares (the “Award”), subject to certain restrictions, terms and conditions as set forth in this Agreement. Each vested Deferred Share entitles the Participant to receive the one Share, such Share subject to the transfer restrictions as described in Paragraph 3 until such Share is vested, as described in Paragraph 2 below.
2. Vesting of Award; Dividend Equivalents.
Deferred Shares shall be earned in accordance with the performance goals set forth in Exhibit A attached hereto based on the Company’s performance during the [_______] fiscal year. Immediately following the end of the [_______] fiscal year, the Board shall determine the extent to which the performance goals have been satisfied and the number of Deferred Shares that the Participant has earned with respect to the Award. To the extent the Deferred Shares are earned, the Deferred Shares will be deemed to vest on [_______],[_______] (the “Initial Vesting Date”). Any Deferred Shares that the Board deems have not been earned shall be forfeited.
Any Shares required to be delivered to you as a result of the vesting of Deferred Shares (the “Earned Shares”) shall be delivered no later than [_______],[_______]. Such Earned Shares shall be subject to forfeiture and transfer restrictions and shall vest on [_______],[_______] (the “Subsequent Vesting Date”), if the Participant continues to be employed by, or provide service to, the Company from the Date of Grant until the Subsequent Vesting Date. The Participant will be entitled to exercise voting rights with respect to the Earned Shares prior to the Subsequent Vesting Date.
Unless otherwise provided in a Company-sponsored plan, policy or arrangement, or any agreement to which the Company is a party, the Participant shall forfeit the Award or the Earned Shares in the event the Participant ceases to be employed by, or provide service to, the Company prior to the Initial Vesting Date or the Subsequent Vesting Date, as applicable.
The Deferred Shares and Earned Shares issued pursuant to this Agreement may not be assigned, transferred, hypothecated, or encumbered, in whole or in part, either directly or by operation of law or otherwise, including, but not limited to, by execution, levy, garnishment, attachment, pledge, bankruptcy, or in any other manner, except transfer by will or by the laws of descent and distribution. All rights with respect to this Award shall be exercisable during the Participant’s lifetime only by the Participant or the Participant’s guardian or legal representative.
On each dividend payment date for each cash dividend on the Shares, the Company will credit the Participant with dividend equivalents in cash (the “Cash Dividends”). The Cash Dividends shall be subject to the same vesting requirements applicable to the Deferred Shares or Earned Shares, as applicable, in respect of which they were credited and shall be settled in accordance with, and at the time of, settlement of the vested Earned Shares to which they are related. Cash Dividends applicable to Deferred Shares and/or Earned Shares that are subsequently forfeited shall be forfeited. If the Participant’s vested Earned Shares have been settled after the record date but prior to the dividend payment date, any Cash Dividends that would be credited pursuant to this Section 4 shall be settled on or as soon as practicable after the dividend payment date.
5. No Stockholder Rights Prior to Settlement; Issuance of Certificates.
(a) The Participant shall have no rights as a stockholder with respect to any Shares represented by the Deferred Shares until the date of issuance of the Earned Shares (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), if applicable. Unless otherwise required by the Plan or this Agreement, no adjustment shall be made for dividends, distributions, or other rights for which the record date is prior to the date, if any, that Shares are issued.
(b) Stock certificates representing the Earned Shares may be issued by the Company and held in escrow by the Company until the Earned Shares vest, or the Company may hold non-certificated shares until the Earned Shares vest.
(c) When the Participant obtains a vested right to the Earned Shares, a certificate representing the vested shares shall be issued to the Participant, free of the restrictions under Section 3 of this Agreement.
(d) The obligation of the Company to deliver shares upon the vesting of the Award shall be subject to all applicable laws, rules, and regulations and such approvals by governmental agencies as may be deemed appropriately to comply with relevant securities laws and regulations.
The provisions of the Plan applicable to a Change in Control or other corporate transaction (as described in Sections 8 and 9 of the Plan) shall apply to the Award.
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The Participant shall be required to pay to the Company, or make other arrangements satisfactory to the Company to provide for the payment of, any federal, state, local or other taxes that the Company is required to withhold with respect to the grant or vesting of the Award. Subject to Committee approval, the Participant may elect to satisfy any tax withholding obligation of the Company with respect to the Award by having shares withheld up to an amount that does not exceed the minimum applicable withholding tax rate for federal (including FICA), state, local and other tax liabilities.
(f) Governing Law. The validity, construction, interpretation and effect of this Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to the conflict of laws provisions thereof
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[Signature Page Follows]
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IN WITNESS WHEREOF, the Company and Participant have executed this Agreement as of the grant date shown above.
Medifast, Inc. | ||
By: | ||
Name: | ||
Title: | ||
GRANTEE: | ||
Name: [Insert Name] |
(Signature Page to Performance-Based Deferred Share Award Agreement)
EXHIBIT A
[_______] Performance Goals