EXHIBIT 10.i(iii)
FINGERHUT COMPANIES, INC.
1995 LONG-TERM INCENTIVE AND STOCK OPTION PLAN
RESTRICTED STOCK AWARD AGREEMENT
This Restricted Stock Agreement is made as of February
14, 1996 by and between Fingerhut Companies, Inc. (the
"Company") and [name] ("the Participant").
WHEREAS, the Compensation Committee (the "Committee")
of the Board of Directors of the Company (the "Board")
desires to provide Participant with an award of restricted
shares of common stock of the Company pursuant to the
provisions of the Fingerhut Companies, Inc. 1995 Long-Term
Incentive and Stock Option Plan (the "Plan") and this
Restricted Stock Award Agreement (the "Agreement"), and
Participant desires to acquire such option.
NOW, THEREFORE, for and in consideration of the mutual
covenants and promises contained herein, and for other
valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as
follows:
1. Award of Restricted Stock
The Company hereby grants to the Participant a
restricted stock award of [number] ([no]) shares (the
"Shares") of common stock, par value $.01 per share, of the
Company (the "Common Stock"') subject to the terms and
conditions set forth herein and in the Plan. The grant of
this award of Shares to the Participant shall become
effective upon the Participant signing and returning this
Agreement to the Senior Vice President, Human Resources of
the Company.
2. Vesting; Change in Control
(a) Subject to the terms and conditions of this
Agreement, the Shares shall vest in Participant according to
the following schedule: 25% on March 31, 1996, 25% on March
31, 1997 and 50% on August 31, 1998, if Participant remains
continuously employed by the Company or any of its
subsidiaries until such respective dates. The portion of
the Shares that vest on March 31, 1996 shall remain subject
to the transfer restrictions set forth in Section 4(b).
(b) Notwithstanding the foregoing, in the event of a
Change in Control (as defined below) prior to the vesting of
the Shares, all Shares shall vest in full in Participant as
of the date of such Change in Control if Participant has
been continuously employed by the Company or any of its
subsidiaries until the date of such Change in Control.
(c) For purposes of this Agreement, "Change in
Control" shall mean:
(i) a change in control of a nature that would be
required to be reported in response to Item 6(e) of Schedule
14A of Regulation 14A promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"),
whether or not the Company is then subject to such reporting
requirement; or
(ii) the public announcement (which, for purposes
of this definition, shall include, without limitation, a
report filed pursuant to Section 13(d) of the Exchange Act)
by the Company or any "person" (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act) that such
person has become the "beneficial owner" (as defined in Rule
13d-3 promulgated under the Exchange Act), directly or
indirectly, of securities of the Company representing 30% or
more of the combined voting power of the Company's then
outstanding securities; provided, however, that
notwithstanding the foregoing, no Change of Control shall be
deemed to have occurred for purposes of this Agreement by
reason of ownership of 30% or more of the total voting
capital stock of the Company then issued and outstanding by
any subsidiary of the Company or any employee benefit plan
of the Company or of any subsidiary of the Company or any
entity holding shares of the Common Stock organized,
appointed or established for, or pursuant to the terms of,
any such plan (any such person or entity described in this
proviso is referred to herein as a "Company Entity"); or
(iii) the announcement of a tender offer by
any person or entity (other than a Company Entity) for 30%
or more of the Company's voting capital stock then issued
and outstanding, which tender offer has not been approved by
the Board, a majority of the members of which are Continuing
Directors (as hereinafter defined), and recommended to the
shareholders of the Company; or
(iv) the Continuing Directors (as hereinafter
defined) cease to constitute a majority of the Company's
Board of Directors; or
(v) the shareholders of the Company approve (x)
any consolidation or merger of the Company in which the
Company is not the continuing or surviving corporation or
pursuant to which shares of Company stock would be converted
into cash, securities or other property, other than a merger
of the Company in which shareholders immediately prior to
the merger have the same proportionate ownership of stock of
the surviving corporation immediately after the merger; (y)
any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or
substantially all of the assets of the Company; or (z) any
plan of liquidation or dissolution of the Company.
(b) "Continuing Director" shall mean any person who is
a member of the Board of Directors of the Company, while
such person is a member of the Board of Directors, who is
not an Acquiring Person (as defined below) or an Affiliate
or Associate (as defined below) of an Acquiring Person, or a
representative of an Acquiring Person or of any such
Affiliate or Associate, and who (x) was a member of the
Board of Directors on the date of this Agreement as first
written above or (y) subsequently becomes a member of the
Board of Directors, if such person's initial nomination for
election or initial election to the Board of Directors is
recommended or approved by a majority of the Continuing
Directors. For purposes of this subparagraph (ii),
"Acquiring Person" shall mean any "person" (as such term is
used in Sections 13(d) and 14(d) of the Exchange Act) who or
which, together with all Affiliates and Associates of such
person, is the "beneficial owner" (as defined in Rule 13d-3
promulgated under the Exchange Act), directly or indirectly
of securities of the Company representing 30% or more of the
combined voting power of the Company's then outstanding
securities, but shall not include any Company Entity; and
"Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 promulgated
under the Exchange Act.
3. Forfeiture; Early Vesting in Event of Death or
Disability
(a) If Participant ceases to be an employee of the
Company or any of its subsidiaries (as defined in the Plan)
for any reason other than death or Disability (as defined
below) prior to the vesting of the Shares pursuant to
Section 2 hereof, then Participant's rights to all of the
Shares not theretofore vested shall be immediately and
irrevocably forfeited.
(b) If Participant ceases to be an employee of the
Company or any of its subsidiaries by reason of death or
Disability prior to the vesting of the Shares pursuant to
Section 2 hereof, then Participant or Participant's
Representative (as defined below) shall become immediately
vested, as of the date of such death or Disability in all
unvested Shares. No transfer by will or by laws of descent
and distribution of any Shares which vest by reason of
Participant's death shall be effective to bind the Company,
unless the Company shall have been furnished with written
notice of such transfer and a copy of the will or such other
evidence as the Company may deem necessary to establish the
validity of the transfer.
(c) For purposes of this Agreement, the following
terms shall be defined as follows:
(i) "Disability" shall have the meaning given to
"permanent and total disability" in Section 22(e)(3) of the
Code (as defined in the Plan) and shall be determined by the
Committee (as defined in the Plan) in its sole and absolute
discretion.
(ii) "Representative" shall mean the person or persons
to whom Participant's rights under this Agreement shall pass
upon death, whether by will or by the applicable laws of
descent and distribution.
(d) A leave of absence granted in accordance with the
Company's usual procedure which does not operate to
interrupt continuous employment for other benefits granted
by the Company shall not be considered a termination of
employment under this Agreement. A period of "related
employment" during which Participant is not employed by the
Company nor a subsidiary (as defined in the Plan) shall not
be considered a termination of employment under this
Agreement if (i) such employment is undertaken by
Participant at the request of the Company or a subsidiary,
(ii) immediately prior to the undertaking of such employment
Participant was an officer or employee of the Company or a
subsidiary or was engaged in related employment, and (iii)
such employment is recognized by the Committee, in its sole
discretion, as related employment. The death or Disability
of Participant during a period of related employment shall
be treated, for purposes of this agreement, as if such death
or the onset of such disability had occurred while
Participant was an officer or employee of the Company or a
subsidiary.
(e) The Committee may accelerate the vesting schedule
provided in Section 2 at any time in its sole discretion.
4. Restriction on Transfer
(a) Except as provided in subsection 4(b) below, none
of the Shares may be sold, assigned, transferred, pledged,
hypothecated or otherwise disposed of or encumbered until
they vest pursuant to Section 2 or 3 hereof, and no attempt
to transfer the unvested Shares, whether voluntary or
involuntary, by operation of law or otherwise, shall vest
the transferee with any interest or right in or with respect
to such Shares.
(b) To the extent such transfers are permitted under
the Plan and are not restricted by Rule 16b-3 promulgated
under the Exchange Act, the Committee, in its sole
discretion, may establish, as permitted by applicable law,
rules and conditions under which a Participant may transfer
the unvested restricted stock granted pursuant to this
Agreement to any member of Participant's "immediate family"
(as such term is defined in Rule 16a-1(e) promulgated under
the Exchange Act), to a trust whose beneficiaries are
members of Participant's "immediate family" or to or for the
benefit of an organization exempt from federal income tax
pursuant to Section 501 of the Code. Any such transferee
will remain subject to the vesting and forfeiture provisions
contained in Section 2 and 3 hereof.
(c) Notwithstanding the foregoing, none of the Shares
may be sold, assigned, transferred, pledged, hypothecated or
otherwise disposed of or encumbered until August 15, 1996,
and no attempt to transfer the Shares, whether voluntary or
involuntary, by operation of law or otherwise, shall vest
the transferee with any interest or right in or with respect
to the Shares.
5. Issuance and Custody of Certificate
(a) The Company shall cause to be issued one or more
stock certificates, registered in the name of Participant,
evidencing the Shares. Unvested Shares may be registered in
book entry form at the Company's transfer agent. Each such
certificate or book entry registration shall bear one or
both of the following legends or other similar legends:
(i) "THE SHARES OF COMMON STOCK REPRESENTED
BY THIS CERTIFICATE ARE SUBJECT TO FORFEITURE, AND
THE TRANSFERABILITY OF THIS CERTIFICATE AND THE
SHARES OF COMMON STOCK REPRESENTED HEREBY ARE
SUBJECT TO THE RESTRICTIONS, TERMS AND CONDITIONS
(INCLUDING RESTRICTIONS AGAINST TRANSFER)
CONTAINED IN THE FINGERHUT COMPANIES, INC. 1995
LONG-TERM INCENTIVE AND STOCK OPTION PLAN AND A
RESTRICTED STOCK AWARD AGREEMENT ENTERED INTO
BETWEEN FINGERHUT COMPANIES, INC. AND THE
REGISTERED OWNER OF SUCH SHARES. COPIES OF SUCH
PLAN AND AGREEMENT ARE ON FILE IN THE OFFICE OF
THE SECRETARY OF FINGERHUT COMPANIES, INC., ▇▇▇▇
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(ii) If required under then applicable
securities laws: "THE SECURITIES REPRESENTED BY
THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 OR ANY APPLICABLE STATE
SECURITIES LAWS. SUCH SECURITIES MAY NOT BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF WITHOUT (I)
THE OPINION OF COUNSEL SATISFACTORY TO THE ISSUER
OF SUCH SECURITIES THAT SUCH TRANSFER MAY LAWFULLY
BE MADE WITHOUT REGISTRATION OR QUALIFICATION
UNDER THE SECURITIES ACT OF 1933 AND APPLICABLE
STATE SECURITIES LAWS OR (II) SUCH REGISTRATION OR
QUALIFICATION."
(b) Participant agrees to sign stock powers relating
to the Shares from time to time and to deliver them to the
Company. These stock powers will be used to authorize the
issuance of new certificates upon lapse of restrictions upon
vesting.
(c) Each certificate issued pursuant to Section 5(a)
hereof, together with the stock powers relating to the
Shares, shall be deposited by the Company with the Secretary
of the Company or a custodian designated by the Secretary.
Upon request, the Secretary or such custodian shall issue a
receipt to the Participant evidencing the certificate or
certificates held which are registered in the name of the
Participant.
(d) After Shares vest pursuant to Sections 2 or 3
hereof, the Company shall promptly cause to be issued a
certificate or certificates evidencing such vested Shares,
free of the legend provided in Section 5(a)(i) and, subject
to receipt of an opinion of counsel satisfactory to the
Company (which may be counsel for the Company), free of the
legend provided in Section 5(a)(ii) hereof, and shall cause
such certificate or certificates, the stock powers relating
to such vested Shares and any additional shares of Common
Stock, any securities and any other property held in custody
with respect to such vested Shares pursuant to Section 6(c)
hereof to be delivered to the Participant or the
Participant's Representative. Only whole Shares shall be
issued to the Participant pursuant to this Agreement.
6. Distributions and Adjustments
(a) In the event that the outstanding shares of Common
Stock (other than shares held by dissenting shareholders)
shall be changed into, or exchanged for, a different number
or kind of shares of Common Stock or other securities of the
Company, or, if further changes or exchanges of any Common
Stock or other securities into which the Common Stock shall
have been changed, or for which it shall have been
exchanged, shall be made (whether by reason of merger,
consolidation, reorganization, recapitalization, stock
dividend, reclassification, split-up, combination of shares
or otherwise), then for each Share, there shall be
substituted and exchanged therefor the number and kind of
shares of Common Stock or other securities into or for which
each outstanding share of Common Stock (other than shares
held by dissenting shareholders) shall be so changed or
exchanged. If in the event of any such changes or exchanges
in order to prevent dilution or enlargement of rights under
this Agreement, it is necessary to make an adjustment in the
number or kind of the Shares, such adjustment shall be made
by the Committee and shall be effective and binding for all
purposes of this Agreement.
(b) Any additional shares of Common Stock, any other
securities of the Company and any other property (except for
cash dividends or other cash distributions) distributed with
respect to the Shares prior to the date the Shares vest
shall be subject to the same restrictions, terms and
conditions as the Shares. Any cash dividends or other cash
distributions payable with respect to the Shares shall be
distributed to Participant at the same time cash dividends
or other cash distributions are distributed to stockholders
of the Company generally.
(c) Any additional shares of Common Stock, any
securities and any another property (except for cash
dividends or other cash distributions) distributed with
respect to the Shares prior to the date such Shares vest
shall be promptly deposited with the Secretary or the
custodian designated by the Secretary to be held in custody
in accordance with Section 5(c) hereof.
7. Taxes
The Participant shall immediately notify the Company of
any election he/she may make under Section 83 of the Code
with respect to this restricted stock award. In order to
comply with all applicable federal or state income, social
security, payroll, withholding or other tax laws or
regulations, the Company may take such action, and may
require Participant to take such action, as it deems
appropriate to ensure that all applicable federal or state
income, social security, payroll, withholding or other
taxes, which are the sole and absolute responsibility of the
Participant, are withheld or collected from Participant.
The Company reserves the right to withhold from any transfer
or payment under the Plan or from any other payment due to
the Participant from the Company any taxes as may be
required pursuant to law and the Participant shall provide
any documentation necessary with respect to such
withholding. The Participant shall, if required by the
Company in its discretion, pay to the Company in cash any
amount required to be withheld for any applicable employment
or withholding taxes, and the Company may condition delivery
of vested, nonrestricted stock certificates upon receipt of
such payment.
8. Miscellaneous
(a) This Agreement is subject in all respects to the
terms of the Plan. By signing this Agreement, the
Participant acknowledges receipt of a copy of the Plan. In
the event that any provision of this Agreement is
inconsistent with the terms of the Plan, the terms of the
Plan shall govern. Any question of administration or
interpretation arising under this Agreement shall be
determined by the Committee or its delegates, and such
determination shall be final and conclusive upon all parties
in interest.
(b) Any compensation realized from the receipt or
payment of (or the lapse of restrictions relating to) this
restricted stock award shall constitute a special long-term
incentive payment to the Participant and shall not be taken
into account as compensation in determining the amount of
any benefit under any retirement or other employee benefit
plan of the Company or any of its affiliates.
10. Limitation of Liability. Nothing in this
Agreement shall be construed to:
(a) limit in any way the right of the Company or a
subsidiary to terminate the employment of Participant; or
(b) be evidence of any agreement or understanding,
express or implied, that the Company or a subsidiary shall
employ Participant in any particular position at any
particular rate of compensation or for any particular period
of time.
11. Severability. It is intended that each provision
of this Agreement shall be viewed as separate and divisible.
In the event that any provision hereof shall be held to be
invalid or unenforceable, the remaining provisions of this
Agreement shall continue to be in full force and effect.
12. Governing Law. This Agreement shall be construed
in accordance with and governed by the internal laws of the
State of Minnesota without regard for conflicts of laws
principles thereof.
13. Further Assurances. Each party hereto agrees to
execute and deliver such further instruments and to take
such other action as shall be reasonably required to carry
out the intent and purposes of this Agreement.
14. Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and
the same document.
15. Notices. All notices that are required or may be
given pursuant to the terms of this Agreement shall be in
writing and delivered personally or by registered or
certified mail, return receipt requested, postage prepaid,
addressed as follows and shall be deemed to have been given
upon delivery to the addressee:
To the Company:
Fingerhut Companies, Inc.
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Attention: General Counsel
To Participant:
At Participant's residence address listed in
the Company's personnel records.
Notice of a change in address of one of the parties hereto
shall be given in writing to the other party as provided
above, but shall be effective only upon actual receipt.
16. Amendment. This Agreement may not be amended or
modified by the parties hereto in any manner, except by a
written instrument signed by both parties hereto.
17. Binding Effect: Assignment. This Agreement shall
be binding upon the heirs, successors and assigns of the
parties hereto. This Agreement shall not be assigned by
either party hereto without the express written consent of
the other party.
18. Entire Agreement. The Plan and this Agreement
constitute, except as to any written agreement between the
parties hereto which specifically references this Section
18, the entire understanding between the parties hereto with
respect to the matters covered herein and supersede all
previous written, oral or implied understandings between the
parties hereto with respect to the subject matter hereof.
IN WITNESS WHEREOF, the Company and Participant
have executed this Agreement as of the day and year first
above written.
FINGERHUT COMPANIES, INC.
By
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PARTICIPANT SIGNATURE
[name]
Social Security #: [ssn]
Date: