200_ RESTRICTED STOCK UNIT AWARD
AGREEMENT EVIDENCING A GRANT OF
RESTRICTED STOCK UNITS
1. GRANT OF UNITS. Pursuant to the ▇▇▇▇▇▇ Brothers Holdings Inc.
("Holdings") 2005 Stock Incentive Plan (the "Plan"), you are hereby granted, as
of _________, 200__ (the "Date of Grant"), the number of Restricted Stock Units
("Units") for shares of Holdings' common stock, par value $.10 per share (the
"Common Stock"), set forth on the award statement with your name on it delivered
to you herewith (which number of Units may be adjusted pursuant to Paragraph 8
below).
2. ADDITIONAL DOCUMENTS; DEFINITIONS. You have been provided with a copy
of the Plan, which is incorporated in this instrument by reference and made a
part hereof, and a copy of the Plan prospectus. The Plan and the prospectus
should be carefully examined. In the event of any conflict or ambiguity between
this instrument and the Plan, the terms of the Plan shall govern. All
capitalized terms not defined herein or on Annex A attached hereto shall have
the meaning ascribed to such terms under the Plan.
3. VESTING. Subject to Paragraph 4, Units awarded to you hereunder shall
become vested in accordance with the following vesting schedule:
o ______ of the Principal Units (__% of the total award) shall
become vested on _________, 200__.
o The remaining ____ Principal Units and all of the Discount Units
(__% of the total award) shall become vested on _________,
200__.
4. ENTITLEMENT TO RECEIVE COMMON STOCK.
(a) General Rule. Unless otherwise set forth herein, you shall
receive one share of Common Stock for each Unit that you hold on ________, 200__
(the "Maturity Date") and you shall be entitled to receive freely transferable
Shares of Common Stock as soon as practicable after the Maturity Date, but no
later than the end of the calendar year in which the Maturity Date occurs.
(b) Effect of Detrimental Activity. Notwithstanding any other
provision of this Agreement if you engage in Detrimental Activity at any time
prior to the Share Payment Date, all Units held by you shall be forfeited and
canceled.
(c) Effect of Termination. In the event of your Termination for any
reason or notification of Termination prior to __________, 200__, all Units held
by you shall be forfeited and cancelled. In the event of any Termination not
described in the preceding sentence, the following rules shall apply:
(i) Voluntary Termination with Competitive Activity. In the
event of your voluntary Termination with Competitive Activity, (i) all Discount
Units shall be
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forfeited and canceled, (ii) if such Termination occurs prior to
_________, 200__, all Principal Units shall be forfeited and canceled and (iii)
if such Termination occurs on or subsequent to __________, 200__, you shall be
entitled to receive freely transferable shares of Common Stock for _____ of the
Principal Units (___% of the total award).
(ii) Voluntary Termination without Competitive Activity. In
the event of your voluntary Termination without Competitive Activity, you shall
be entitled to receive (i) freely transferable shares of Common Stock for the
Principal Units and (ii) freely transferable shares of Common Stock equal to
___% of the Discount Units multiplied by each full year of your employment with
Holdings or a Subsidiary after ___________, 200__ and before your Termination.
However, if your Termination is a Full Career Termination, you will be entitled
to receive freely transferable shares of Common Stock for all the Discount Units
provided you do not engage in Competitive Activity prior to the Share Payment
Date. In the event of Competitive Activity prior to the Share Payment Date, the
provisions specified in Paragraph 4(c)(i) shall apply.
(iii) Involuntary Termination with Cause. In the event of
your involuntary Termination with Cause, all Principal Units and Discount Units
shall be immediately forfeited and canceled.
(iv) Involuntary Termination without Cause. In the event of
your involuntary Termination without Cause, you shall be entitled to receive (i)
freely transferable shares of Common Stock for the Principal Units and (ii)
freely transferable shares of Common Stock equal to __% of the Discount Units
multiplied by each full year of your employment with Holdings or a Subsidiary
after ___________, 200__ and before your Termination. However, if your
Termination is a Full Career Termination, you will be entitled to receive freely
transferable shares of Common Stock for all the Discount Units.
(v) Termination Due to Death; Disability. Notwithstanding
the foregoing provisions of Paragraph 4(c)(i), (ii), (iii) and (iv), in the
event of the occurrence (i) your death or Disability or (ii) your death or
Disability following a Termination described in Paragraph 4(c)(ii) or (iv)
hereof, all outstanding Units held by you shall become immediately payable and
you shall, as soon as practicable thereafter, receive freely transferable shares
of Common Stock.
Any shares that become payable pursuant to this Paragraph 4(c) (other than
Paragraph (c)(v)) shall be issued to you on the Share Payment Date, subject to
the application of Paragraph 4(b). Notwithstanding any other provisions of this
Agreement, if any payment otherwise due hereunder would have the effect of
making you subject to the tax imposed by Code Section 409A(a)(1), such payment
shall be postponed until the earliest date upon which the payment could be made
without subjecting you to such tax. Any remaining Units that are not payable
pursuant to the provisions of the Paragraph 4(c) shall be canceled by Holdings.
(d) Affidavit. In the event of your Termination on or after _________,
200__, you may be requested, from time to time after your Termination, to
complete and sign an
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affidavit with respect to Competitive Activity or Detrimental Activity, which
includes representations and authorizes Holdings to verify the representations.
Any failure on your part to complete, sign and return the affidavit within 60
days may cause you to forfeit all Units held by you at that time.
5. DIVIDEND EQUIVALENTS. With respect to each regular cash dividend or
distribution paid or made on Common Stock to holders of record on or after
__________, 200__, you shall be credited with a number of additional Units
comparable in value to such dividend or distribution. Such additional Units
shall vest and become payable at the same time as the Units to which they are
attributable.
6. LIMITATION ON OBLIGATIONS. Holdings' and any Subsidiary's obligation
with respect to the Units granted hereunder is limited solely to the delivery to
you of shares of Common Stock on the date when such shares are due to be
delivered hereunder, and in no way shall Holdings or any Subsidiary become
obligated to pay cash in respect of such obligation (except for cash paid
pursuant to Paragraphs 5 and 9 hereof).
7. NON-ASSIGNMENT. Units may not be sold, assigned, transferred,
pledged, hypothecated, or otherwise disposed of by you, except by will or the
laws of descent and distribution. If you or anyone claiming under or through you
attempts to violate this Paragraph 7, such attempted violation shall be null and
void and without effect, and Holdings' obligation to issue any Common Stock
hereunder shall terminate.
8. EQUITABLE ADJUSTMENT. In the event of a Change in Capitalization
occurring on or after the Date of Grant specified above and prior to the Share
Payment Date, the number and kind of shares of Common Stock which may be issued
with respect to Units shall be adjusted so as to reflect such change in a manner
consistent with the provisions of Code Section 409A.
9. CHANGE IN CONTROL. Except as set forth below, upon the occurrence of
a Hostile Change in Control, your Units shall vest immediately, the sales
restrictions shall lapse and shares of Common Stock shall be issued. Except as
set forth below, upon the occurrence of a Friendly Change in Control, you shall
receive, in the same form of consideration as that received by shareholders
generally, the lesser of (a) the undiscounted market value (at the time of
grant) of the shares of Common Stock underlying your outstanding Units or (b)
the price paid by an acquirer for such shares of Common Stock, and the excess,
if any, of the price paid by an acquirer over such undiscounted market value
shall be deferred for the shorter of (x) two years following such Change in
Control or (y) the term of any remaining restrictions (the "Deferred Period"),
but your Units shall remain otherwise subject to all issuance restrictions
during the Deferred Period. Neither of the foregoing shall be effective to the
extent you have tender or voting rights over shares of Common Stock held in
Trust with respect to any Units, in which case you would only be issued Common
Stock or receive the undiscounted market value in the same form of consideration
as that received by shareholders generally (and after the Deferred Period, the
excess price) in respect of such Units upon successful completion of a Change in
Control.
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10. TREATMENT IN BANKRUPTCY. (a) If you are an employee of Holdings,
Holdings agrees to deliver, and (b) if you are an employee of a Subsidiary,
Holdings agrees to deliver to (or at the direction of) such Subsidiary, shares
of Common Stock on the date when such shares are due to be delivered under this
Agreement in satisfaction of each Unit granted to you hereunder. If you are an
employee of a Subsidiary, Holdings' obligation in clause (b) of the preceding
sentence is created expressly for the benefit of you, and you shall have the
full right to enforce Holdings' obligation to deliver Common Stock as if such
obligation were made directly in favor of you. All of your claims arising from,
in connection with, or in any way relating to, any failure of Holdings to
deliver to you, or to a Subsidiary for delivery by such Subsidiary to you,
shares of Common Stock on the date when such shares are due to be delivered
under this Agreement in satisfaction of each Unit granted to you shall be
deemed, in the event of a bankruptcy of Holdings, to be claims for damages
arising from the purchase or sale of Common Stock of Holdings, within the
meaning of section 510(b) of the Bankruptcy Code and shall have in such
bankruptcy the same priority as, and no greater priority than, common stock
interests in Holdings.
11. AMENDMENT. The terms of this Agreement may be amended from time to
time by the Committee in its sole discretion in any manner that it deems
appropriate, provided, however, that no such amendment shall, without your
consent, diminish your rights under this Agreement.
12. BINDING ACTIONS. Any action taken or decision made by the Committee
or its designees arising out of or in connection with the construction,
administration, interpretation or effect of the Plan or this Agreement shall lie
within its sole and absolute discretion, as the case may be, and shall be final,
conclusive and binding on you and all persons claiming under or through you. By
accepting this grant or other benefit under the Plan, you and each person
claiming under or through you shall be conclusively deemed to have indicated
acceptance and ratification of, and consent to, any action taken under the Plan
by the Committee or its designees.
13. NO RIGHT TO CONTINUED EMPLOYMENT. The grant of Units shall not
confer on you any right to be retained in the employ of Holdings or a
subsidiary, or to receive subsequent Units or other awards under the Plan. The
right of Holdings or any subsidiary to terminate your employment with it at any
time or as otherwise provided by any agreement between Holdings or any
subsidiary and you is specifically reserved.
14. APPLICABLE LAW. The validity, construction, interpretation,
administration, and effect of the Plan, and of its rules and regulations, and
rights relating to the Plan and to this Agreement, shall be governed by the
substantive laws, but not the choice of law rules, of the State of Delaware.
15. WITHHOLDING/DEDUCTIONS. Holdings shall have the right to deduct
applicable taxes from all amounts payable to you. It shall be a condition to the
obligation of Holdings to issue shares of Common Stock hereunder (a) that you
(or, in event of your death, your estate or any person who acquires the right to
this award by bequest or inheritance or otherwise by reason of your death) pay
to Holdings or its designee, upon its demand, in accordance with the Plan,
either in the form of cash or freely transferable shares of Common
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Stock such amount as may be required by law for the purpose of satisfying its
obligation or the obligation of any other person to withhold any taxes required
by law which are incurred by reason of the issuance of such shares of Common
Stock, and (b) that you (or, in the event of your death, your estate or any
person who acquires the right to this award by bequest or inheritance or
otherwise by reason of your death) provide Holdings with any forms, documents or
other information reasonably required by Holdings in connection with the grant.
If the amount requested for the purpose of satisfying the withholding obligation
is not paid, Holdings may refuse to issue shares of Common Stock and/or related
dividend equivalents or take any other action it deems necessary to fulfill the
withholding obligation. Holdings shall further have the right to deduct from all
amounts remaining payable to you after satisfaction of the minimum statutory
withholding obligations described above, the amount of any deficit, debt, tax
obligation or other liability or obligation of any kind which you may at that
time have with respect to Holdings or any Subsidiary.
ANNEX A
DEFINITIONS
"Cause" means a material breach by a person of an employment contract
between the person and Holdings or any Subsidiary, failure by a person to devote
substantially all business time exclusively to the performance of his or her
duties for Holdings or any Subsidiary, willful misconduct, dishonesty related to
the business and affairs of Holdings or any Subsidiary, conviction of a felony
or of a misdemeanor constituting a statutory disqualification under U.S.
securities laws (or failure to contest prosecution for a felony or such a
misdemeanor), habitual or gross negligence in the performance of the person's
duties, solicitation of employees of Holdings or any Subsidiary to work at
another company, improper use or disclosure of confidential information, the
violation of policies and practices adopted by Holdings or any Subsidiary
including, but not limited to the Code of Conduct, or a material violation of
the conflict of interest, proprietary information or business ethics policies of
Holdings or any Subsidiary.
"Change in Capitalization" means the occurrence of a circumstance
described in Section 14 of the Plan.
"Committee" shall mean the Compensation and Benefits Committee of the
Incumbent Board (see definition of Change in Control in the Plan).
"Competitive Activity" means involvement (whether as an employee,
proprietor, consultant or otherwise) with any person or entity (including any
company and its affiliates) engaged in any business activity which is materially
competitive with any business carried on by Holdings or any of its Subsidiaries
or affiliates on the date of termination of a person's employment with Holdings
and any of its Subsidiaries, as determined in the sole discretion of the
Committee.
"Detrimental Activity" means (i) using information received during a
person's employment with Holdings or any of its Subsidiaries relating to the
business affairs of Holdings or any of its Subsidiaries, affiliates or clients,
in breach of such person's undertaking to keep such information confidential;
(ii) directly or indirectly persuading or attempting to persuade, by any means,
any employee of Holdings or any of its Subsidiaries or affiliates to terminate
employment with any of the foregoing or to breach any of the terms of his or her
employment with the foregoing; (iii) directly or indirectly making any statement
that is, or could be, disparaging of Holdings, its Subsidiaries or affiliates,
or any of their affiliates (except as necessary to respond truthfully to any
inquiry from applicable regulatory authorities or to provide information
pursuant to legal process); or (iv) directly or indirectly engaging in any
activity that is, or could be, substantially injurious to the financial
condition, reputation, or goodwill of Holdings or its Subsidiaries or
affiliates, in each case as determined in the sole discretion of the Committee.
"Disability" means a disability under both the Long-Term Disability
Insurance Plan and the Social Security Act.
"Discount Units" shall mean the number of Units (and any
dividend equivalents related thereto) related to the ___% discount upon issuance
of the award.
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"Full Career Termination" means a Termination when (i) a
person has at least 20 years of service or (ii) a person meets all of the
following criteria: (x) the person's age plus years of service with Holdings or
any subsidiary equals at least 65, (y) the person is at least 45 years old, and
(z) the person has at least 10 years of service with Holdings or any subsidiary.
"Principal Units" shall mean the number of Units (and any dividend
equivalents related thereto) related to the undiscounted base portion of the
award (___% of the total number of units awarded).
"Share Payment Date" means as soon as practicable after the earlier of
(a) the Maturity Date or (b) the completion of the fiscal quarter following the
one-year anniversary of termination of employment, but in no event later than
the end of the calendar year in which the earlier of such dates occurs.
"Termination" means the end of your active service with Holdings or a
Subsidiary. The reason for your Termination for purposes of this agreement shall
be as determined in the sole discretion of the Committee.
