GRANT NOTICE AGREEMENT FOR PERFORMANCE RESTRICTED STOCK AWARD
Exhibit
10.02
GRANT NOTICE AGREEMENT FOR
PERFORMANCE RESTRICTED STOCK AWARD
PERFORMANCE RESTRICTED STOCK AWARD
, 200_
THIS GRANT NOTICE FOR PERFORMANCE RESTRICTED STOCK AWARD (this “Grant Notice”) is entered into
as of the date first written above between Education Management Corporation (the “Company”) and the
Grantee identified below. Capitalized terms used in this Grant Notice shall have the respective
meanings given to such terms in the Agreement, unless otherwise defined in this Grant Notice. This
Grant Notice confirms the grant to the Grantee of an award of Restricted Shares with the terms set
forth below. Such grant was made under the Education Management Corporation 2003 Incentive Plan.
Grantee Name:
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Grant Date:
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, 200_ | |
Number of Restricted Shares
Granted:
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Performance Period:
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July 1, 200___to June 30, 200_ | |
Key Performance Objectives (“KPOs”): |
[KPO’S AND WEIGHTING FOR EACH KPO TO COME] |
This Grant Notice hereby incorporates the provisions with respect to satisfaction of the KPOs
set forth in the Company’s 2006 Management Incentive Compensation Plan (the “2006 MICP”) under the
section titled “Long Term Equity Award Component”. The Restricted Shares granted pursuant to this
Grant Notice (the “Restricted Shares”) will be earned by the Grantee in accordance with the
provisions of the 2006 MICP. The Grantee will have the opportunity to vest in fifty percent (50%)
of the Restricted Shares on each of the first and second anniversaries of the Grant Date to the
extent that the applicable KPOs are satisfied during each such one-year period. Upon vesting, all
restrictions on the vested portion of the Restricted Shares shall cease and shall no longer be in
effect. The determination of whether the Grantee has earned the Restricted Shares will be made in
accordance with the terms of the 2006 MICP. All such determinations shall be final and binding
upon the parties hereto.
This Grant Notice shall be subject to the terms and conditions of this Performance Restricted
Stock Award Agreement (the “Agreement”) attached hereto as Exhibit A. The Agreement shall
be deemed to be incorporated by reference into this Grant Notice to form a complete agreement
between the parties.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound and for good and
valuable consideration, the sufficiency of which is hereby acknowledged, have entered into this
Grant Notice as of the date first written above.
By:
Name:
Title:
Name:
Title:
GRANTEE
Name:
Address:
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EXHIBIT A
PERFORMANCE RESTRICTED STOCK AWARD AGREEMENT
The parties to this Performance Restricted Stock Award Agreement (this “Agreement”) are
Education Management Corporation, a Pennsylvania corporation (the “Company”), and the person
identified as the “Grantee” on the signature page to the Grant Notice (“Grant Notice”) to which
this Agreement is attached as Exhibit A.
The Company has adopted the Education Management Corporation 2003 Stock Incentive Plan, as
amended (the “Plan”), for the benefit of eligible employees of the Company and its Subsidiaries.
Capitalized terms used but not defined in this Agreement shall have the meanings set forth in the
Plan. The Compensation Committee of the Board of Directors of the Company approved the award of
shares of the Company’s Common Stock to the Grantee subject to certain transfer and forfeiture
restrictions set forth in this Agreement, as well as the provisions of the Plan. The Grant Notice
specifies the date of grant of the Award (the “Grant Date”), the number of Restricted Shares
granted and the Key Performance Objective applicable to such Restricted Shares. Such award shall
be subject to the terms and conditions of this Agreement and this Agreement shall be deemed to be
incorporated by reference into the Grant Notice to form a complete agreement between the parties.
| 1. | RESTRICTED SHARES |
1.1 Grant of Restricted Shares.
(a) As of the Date of Grant, the Company grants to the Grantee the number of shares of
Common Stock (the “Restricted Shares”) specified in the Grant Notice, subject to the terms,
condition and restrictions set forth in this Agreement and the terms and conditions of the
Plan. If and when the Restricted Period set forth in the Grant Notice expires without
forfeiture of the Restricted Shares, and upon the satisfaction of all other applicable
conditions as to the Restricted Shares, such shares shall no longer be considered Restricted
Shares for purposes of this Agreement.
(b) As soon as practicable after the Grant Date, the Company shall direct that the
Restricted Shares be credited to the Grantee but held by the Company’s transfer agent in an
account in electronic form. The Restricted Shares shall be subject to such stop-transfer
orders and other restrictions as the Company may deem advisable under the rules,
regulations, and other requirements of the Securities and Exchange Commission, any stock
exchange upon which the Common Stock is then listed, and any applicable federal or state
securities law.
(c) As soon as administratively practicable following the expiration of the Restricted
Period without a forfeiture of such Restricted Shares, and upon the satisfaction of all
other applicable conditions as to the Restricted Shares, including, but not limited to, the
payment by the Grantee of all applicable withholding taxes, the Company shall deliver or
cause to be delivered to the Grantee, either electronically or in certificate form, the
applicable Restricted Shares which shall not bear a restrictive legend. The Company may
cause a legend or legends to be placed on any such stock certificate to make appropriate
reference to any securities law or other legal restrictions applicable to such shares.
1.2 Restrictions.
(a) The Grantee shall have all rights and privileges of a shareholder as to the
Restricted Shares, including the right to vote and receive dividends or other distributions
with respect to the Restricted Shares, except that the following restrictions shall apply:
(i) the Grantee shall not be entitled to delivery of the Restricted Shares,
electronically or in certificate form, until the expiration of the applicable
restrictions as set forth in the Grant Notice and upon the satisfaction of all other
applicable conditions;
(ii) none of the Restricted Shares may be sold, transferred, assigned, pledged
or otherwise encumbered or disposed of during the applicable Restricted Period,
except as provided in Section 7.01(c) of the Plan or as otherwise permitted by the
Committee in its sole discretion or pursuant to rules adopted by the Committee in
accordance with the Plan; provided, however, that unless the Committee determines
otherwise, the Grantee shall be permitted, upon request to the Committee, to sell or
otherwise dispose of a sufficient number of Restricted Shares which have vested in
accordance with this Agreement as may be reasonably necessary to satisfy any
applicable tax liability of the Grantee (including federal, state or local taxes,
estimated tax payments or required tax withholding) related to the vesting of such
Restricted Shares;
(iii) all shares of Common Stock distributed as a dividend or distribution, if
any, with respect to the Restricted Shares prior to the expiration of the Restricted
Period shall be delivered to and held by the Company and subject to the same
restrictions as the Restricted Shares until the termination of the Restricted Period;
and
(iv) all of the Restricted Shares shall be forfeited and returned to the Company
and all rights of the Grantee with respect to the Restricted Shares shall terminate
in their entirety on the terms and conditions set forth in Paragraph 1.3 and in the
Grant Notice.
(b) Any attempt to dispose of Restricted Shares or any interest in the Restricted
Shares in a manner contrary to the restrictions set forth in this Agreement shall be void
and of no effect.
1.3 Vesting/Forfeiture of the Restricted Shares. The Restricted Shares shall be
subject to the vesting terms and conditions set forth in the Grant Notice. In the event any
Restricted Shares are forfeited under the terms and conditions of the Grant Notice, the electronic
records of the Company’s transfer agent shall reflect the cancellation of the Restricted Shares to
the extent of any Restricted Shares that were forfeited.
1.4 Withholding.
(a) The Committee shall determine the amount of any withholding or other tax required
by law to be withheld or paid by the Company with respect to any income recognized by the
Grantee with respect to the Restricted Shares.
(b) The Grantee shall be required to meet any applicable tax withholding obligation in
accordance with the provisions of Section 10.05 of the Plan.
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(c) The Committee shall be authorized, in its sole discretion, to establish such rules
and procedures relating to the use of shares of Common Stock to satisfy tax withholding
obligations as it deems necessary or appropriate to facilitate and promote the conformity of
the Grantee’s transactions under the Plan and this Agreement with Rule 16b-3 under the
Securities Exchange Act of 1934, as amended, if such Rule is applicable to transactions by
the Grantee.
1.5 Committee’s Discretion. Notwithstanding any provision of this Agreement to the
contrary, the Committee shall have discretion under Section 7.02(b) of the Plan to waive any
forfeiture of the Restricted Shares and any other conditions set forth in this Agreement.
| 2. | REPRESENTATIONS OF THE GRANTEE |
The Grantee hereby represents to the Company that the Grantee has read and fully understands
the provisions of this Agreement and the Plan and his or her decision to participate in the Plan is
completely voluntary. Further, the Grantee acknowledges that the Grantee is relying solely on his
or her own advisors with respect to the tax consequences of this restricted stock award.
| 3. | NOTICES |
All notices or communications under this Agreement shall be in writing, addressed as follows:
To the Company:
To the Grantee:
To the address set forth on the Grant Notice
Any such notice or communication shall be (a) delivered by hand (with written confirmation of
receipt) or sent by a nationally recognized overnight delivery service (receipt requested) or (b)
be sent certified or registered mail, return receipt requested, postage prepaid, addressed as above
(or to such other address as such party may designate in writing from time to time), and the actual
date of receipt shall determine the time at which notice was given.
| 4. | ASSIGNMENT; BINDING AGREEMENT |
This Agreement shall be binding upon and inure to the benefit of the heirs and representatives
of the Grantee and the assigns and successors of the Company, but neither this Agreement nor any
rights hereunder shall be assignable or otherwise subject to hypothecation by the Grantee.
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| 5. | ENTIRE AGREEMENT; AMENDMENT; TERMINATION |
This Agreement represents the entire agreement of the parties with respect to the subject
matter hereof. The provisions of the Plan are incorporated in this Agreement in their entirety.
In the event of any conflict between the provisions of this Agreement and the Plan, the provisions
of the Plan shall control. The Agreement may be amended at any time by written agreement of the
parties hereto.
| 6. | GOVERNING LAW |
This Agreement and its validity, interpretation, performance and enforcement shall be governed
by the laws of the Commonwealth of Pennsylvania other than the conflict of laws provisions of such
laws.
| 7. | SEVERABILITY |
Whenever possible, each provision in this Agreement shall be interpreted in such manner as to
be effective and valid under applicable law, but if any provision of this Agreement shall be held
to be prohibited by or invalid under applicable law, then (a) such provision shall be deemed
amended to accomplish the objectives of the provision as originally written to the fullest extent
permitted by law and (b) all other provisions of this Agreement shall remain in full force and
effect.
| 8. | NO RIGHT TO CONTINUED EMPLOYMENT OR PARTICIPATION; EFFECT ON OTHER PLANS |
This Agreement shall not confer upon the Grantee any right with respect to continued
employment by the Company or its Subsidiaries or continued participation under the Plan, nor shall
it interfere in any way with the right of the Company and its Subsidiaries to terminate the
Grantee’s employment at any time. Payments received by the Grantee pursuant to this Agreement
shall not be included in the determination of benefits under any pension, group insurance or other
benefit plan of the Company or any Subsidiaries in which the Grantee may be enrolled or for which
the Grantee may become eligible, except as may be provided under the terms of such plans or
determined by the Board.
| 9. | NO STRICT CONSTRUCTION |
No rule of strict construction shall be implied against the Company, the Committee or any
other person in the interpretation of any of the terms of the Plan, this Agreement or any rule or
procedure established by the Committee.
| 10. | USE OF THE WORD “GRANTEE” |
Wherever the word “Grantee” is used in any provision of this Agreement under circumstances
where the provision should logically be construed to apply to the executors, the administrators, or
the person or persons to whom the Restricted Shares may be transferred by will or the laws of
descent and distribution, the word “Grantee” shall be deemed to include such person or persons.
| 11. | FURTHER ASSURANCES |
The Grantee agrees, upon demand of the Company or the Committee, to do all acts and execute,
deliver and perform all additional documents, instruments and agreements (including, without
limitation, stock powers with respect to shares of Common Stock issued as a dividend or
distribution on Restricted
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Shares) which may be reasonably required by the Company or the Committee, as the case may be, to
implement the provisions and purposes of this Agreement and the Plan.
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