STOCK UNIT AGREEMENT
Exhibit 10.1
GRANTED TO:
DATE OF GRANT:
GRANTED PURSUANT TO: X.X. Xxxxx Arts & Crafts, Inc. 2007 Stock Incentive Plan
NUMBER OF UNITS:
VESTING SCHEDULE:
1. This Stock Unit Agreement (the “Agreement”) is made and entered into as of
(the “Date of Grant”) between X.X. Xxxxx Arts & Crafts, Inc., a Pennsylvania corporation (the
“Company”), and , as a participant (the “Participant”) in the X.X. Xxxxx Arts &
Crafts, Inc. 2007 Stock Incentive Plan (the “Plan”), a copy of which is enclosed herewith.
Capitalized terms not defined herein shall have the meanings ascribed thereto in the Plan.
2. The Participant is granted restricted units of Common Stock of the Company
(the “Stock Units”). The Stock Units are granted as provided for under the Plan and are subject to
the terms and conditions set forth in the Plan and this Agreement. The Stock Units granted
hereunder are a matter of separate inducement and are not in lieu of salary or other compensation
for the services of a Participant to the Company or any of its Affiliates.
3. This grant of Stock Units shall vest in accordance with the following schedule:
[In whole or in part, from immediate vesting to any daily, monthly or yearly vesting up to 10 years
and in combination with any or none of the performance measures permitted to be used under the
Plan, either individually or in any combination and with or without acceleration.]
4. The Stock Units shall be promptly recorded on the books of the Company in the Participant’s
name as restricted Stock Unit awards. When and if the vesting restrictions, as set forth in the
vesting schedule above, terminate, the Participant shall be entitled to a payment in shares of
Common Stock only, one share of Common Stock for each Stock Unit granted hereunder, and the
Participant shall have no rights to the Stock Units until all vesting restrictions terminate.
5. If under Section 12 of the Plan the Participant shall be entitled to new, additional or
different Stock Units, such new, additional or different Stock Units shall be subject to the
restrictions on transferability as provided in Paragraphs 6 and 7 below.
6. The Stock Units shall be subject to restrictions on transferability as provided in
Paragraph 6 below. Subject to Paragraphs 7 through 12, inclusive, below, such restrictions shall be
removed from the Stock Units according to the vesting schedule set forth above. Upon the
termination of vesting restrictions and delivery of shares of Common Stock under this Agreement,
the Participant shall have all the rights of a shareholder with respect to such shares of Common
Stock, including, but not limited to, the right to vote such shares and to receive all dividends
and other distributions paid with respect to them, and all such shares shall be evidenced by a
certificate or certificates, as provided in Paragraphs 13 and 14 below. While the vesting
restrictions are in place, the Participant shall not be entitled to Dividend Equivalents Rights.
Notwithstanding anything contained in this Agreement to the contrary, if there is a Change in
Control of the Company, all unvested Stock Units granted under the this Agreement shall
become fully vested immediately upon the occurrence of the Change in Control and such vested
Stock Units shall be paid out or settled, as applicable, within 60 days upon the occurrence of the
Change in Control, subject to requirements of applicable laws and regulations. The Committee shall
have full discretion, notwithstanding anything herein or in this Agreement to the contrary, with
respect to an outstanding Stock Unit, upon the merger or consolidation or sale or other disposition
of all or substantially all of the assets of the Company, to provide that the securities of another
entity may be substituted hereunder for the shares of Common Stock and to make equitable adjustment
with respect thereto.
7. During the period when the Stock Units are subject to restrictions on transferability, none
of the Stock Units that are subject to such restrictions shall be sold, exchanged, transferred,
pledged, hypothecated or otherwise disposed of except by will or the laws of descent and
distribution. Any attempt by the Participant to dispose of any of the Stock Units in any such
manner shall result in the immediate forfeiture of the Stock Units.
8. If the Participant’s employment is terminated due to death or Disability all unvested Stock
Units held by the Participant on the date of the Participant’s termination of employment due to
death or the date of the termination of his or her employment related to Disability, as the case
may be, shall immediately become vested as of such date.
9. If a Participant’s employment is terminated by the Company for Cause, all Stock Units,
earned or exercisable, held by the Participant on the date of the termination of his or her
employment for Cause shall immediately be forfeited by such Participant as of such date.
10. If a Participant’s employment is terminated for any reason, including, without limitation,
retirement, other than for Cause or other than due to death or Disability, all unvested Stock Units
held by the Participant on the date of the termination of his or her employment shall immediately
be forfeited by such Participant as of such date.
11. Notwithstanding anything contained in this Agreement to the contrary, the Committee may,
in its discretion, provide that any or all unvested Stock Units held by the Participant on the date
of the termination of the Participant’s employment (for other than death or Disability) shall
immediately become vested as of such date.
12. Subject to Section 10(c) of the Plan, the Participant shall be entitled to defer receipt
of shares of Common Stock upon the termination of the vesting restrictions applicable to the Stock
Units only under the terms of an agreement with the Company acceptable to the Company under the
terms of the Plan and applicable law.
13. All payments or distributions of an Award made pursuant to this Agreement shall be net of
any amounts required to be withheld pursuant to applicable federal, state and local tax withholding
requirements. If the Company proposes or is required to distribute Common Stock pursuant to This
Agreement, it may require the Participant receiving such Common Stock to remit to it or to the
Affiliate that employs such Participant an amount sufficient to satisfy such tax withholding
requirements prior to the delivery of any certificates for such Common Stock. In lieu thereof, the
Company or the Affiliate employing the Participant shall have the right to withhold the amount of
such taxes from any other sums due or to become due from the Company or the Affiliate, as the case
may be, to the Participant receiving Common Stock, as the Committee shall prescribe. The Committee
may, in its discretion, and subject to such rules as the Committee may adopt (including any as may
be required to satisfy applicable tax and/or non-tax regulatory requirements), permit a Participant
to pay all or a portion of the federal, state and local withholding taxes arising in connection
with this Award consisting of shares of Common Stock by
electing to have the Company withhold shares of Common Stock having a Fair Market Value equal
to the amount of tax to be withheld, such tax calculated at rates required by statute or
regulation.
14. If the Company, in its sole discretion, shall determine that it is necessary, to comply
with applicable securities laws, the certificate or certificates representing any shares of Common
Stock delivered to the Participant under this Agreement shall bear an appropriate legend in form
and substance, as determined by the Company, giving notice of applicable restrictions on transfer
under or with respect to such laws.
15. The Participant covenants and agrees with the Company that if, with respect to any shares
of Common Stock delivered to the Participant pursuant to this Agreement, there does not exist a
registration statement on an appropriate form under the Securities Act of 1933, as amended (the
“Act”), which registration statement shall have become effective and shall include, or shall be
accompanied by, as applicable, a prospectus that is current with respect to the Stock Units or
shares of Common Stock subject to this Agreement, (i) he or she takes the Stock Units or such
shares of Common Stock for his or her own account and not with a view to the resale or distribution
thereof, (ii) any subsequent offer for sale or sale of any such Stock Units or shares shall be made
either pursuant to (x) a registration statement on an appropriate form under the Act, which
registration statement shall have become effective and shall be current with respect to the Stock
Units or shares being offered and sold, or (y) a specific exemption from the registration
requirements of the Act, but in claiming such exemption, the Participant shall, prior to any offer
for sale or sale of such Stock Units or shares, obtain a favorable written opinion from counsel for
or approved by the Company as to the applicability of such exemption and (iii) the certificate or
certificates evidencing such shares shall bear a legend to the effect of the foregoing.
16. For purposes of this Paragraph 16, (i) if there is an employment agreement or at will
offer letter between the Participant and the Company or any of its Affiliates in effect containing
non-competition provisions, then such provisions shall govern the Participant’s non-competition
obligations; or (ii) if non-competition provisions are not included in such employment agreement or
at will offer letter or if there is no employment agreement or at will offer letter between the
Participant and the Company or any of its Affiliates in effect, then the following provisions of
this Paragraph 16 shall govern the Participant’s non-competition obligations. In consideration of
the grant of the Stock Units to the Participant, the receipt and sufficiency of which are hereby
acknowledged, the Participant agrees that for a period of six (6) months after termination of the
Participant’s employment (the “Non-Compete Period”), the Participant shall not directly or
indirectly own any interest in, manage, control, participate in, consult with, render services for,
or in any manner engage in any business competing with the businesses of the Company or its
Affiliates, as such businesses exist or are in process on the date of the termination of
Participant’s employment, within any geographical area in which the Company or its Affiliates
engage or actively plan to engage in such businesses. Nothing herein shall prohibit Participant
from being a passive owner of not more than 2% of the outstanding stock of any class of a
corporation which is publicly traded, so long as Participant has no direct or indirect active
participation in the business of such corporation. During the Non-Compete Period, the Participant
shall not directly or indirectly through another person or entity (i) induce or attempt to induce
any employee of the Company or any Affiliate to leave the employ of the Company or such Affiliate,
or in any way interfere with the relationship between the Company, its Affiliates and any employee
thereof, (ii) hire an employee of the Company or any of its Affiliates, or (iii) induce or attempt
to induce any customer, supplier, licensee, licensor, franchisee or other business relation of the
Company or any of its Affiliates to cease doing business with the Company or such Affiliate, or in
any way interfere with the relationship between any such customer, supplier, licensee, licensor,
franchisee, or business relation and the Company or any of its Affiliates (including, without
limitation, making any negative statements or communications about the Company or its
Affiliates).The provisions of this Paragraph 16 will be enforced to the fullest extent permitted by
the law in the state in which Participant resides or is employed at the time of the enforcement of
the provision. If, at the time of
enforcement of this Paragraph 16, a court shall hold that the duration, scope or area
restrictions stated herein are unreasonable under circumstances then existing, the parties agree
that the maximum duration, scope or area reasonable under such circumstances shall be substituted
for the stated duration, scope or area and that the court shall be allowed to revise the
restrictions contained herein to cover the maximum period, scope and area permitted by law.
Participant agrees that the restrictions contained in this Paragraph 16 are reasonable. In the
event of the breach or a threatened breach by Participant of any of the provisions of this
Paragraph 16, the Company, in addition and supplementary to other rights and remedies existing in
its favor, may apply to any court of law or equity of competent jurisdiction for specific
performance and/or injunctive or other relief in order to enforce or prevent any violations of the
provisions hereof (without posting a bond or other security). In addition, in the event of an
alleged breach or violation by Participant of this Paragraph 16, the Non-Compete Period shall be
tolled until such breach or violation has been duly cured.
17. This Agreement is subject to all terms, conditions, limitations and restrictions contained
in the Plan, which shall be controlling in the event of any conflicting or inconsistent provisions.
In the event, however, of any conflict between the provisions of this Agreement or the Plan and the
provisions of an employment or change-in-control agreement between the Company and the Participant,
as applicable, the provisions of the latter shall prevail.
18. This Agreement is not a contract of employment, as applicable, and the terms of the
Participant’s employment shall not be affected hereby or by any agreement referred to herein except
to the extent specifically so provided herein or therein. Nothing herein shall be construed to
impose any obligation on the Company to continue the Participant’s employment, and it shall not
impose any obligation on the Participant’s part to remain in the employ of the Company or any of
its Affiliates. This Agreement shall be governed by and construed in accord with the laws of the
Commonwealth of Pennsylvania, excluding principles of conflicts of law.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date written above.
| X.X. XXXXX ARTS & CRAFTS, INC. |
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| By: | ||||
| Name: | ||||
| Title: | ||||
ACCEPTED:
[Insert the name of the Participant]
