EXHIBIT 10.5
 
 
 
TEMPLATE

NOTICE OF RESTRICTED STOCK AWARD

under the

LIFEWAY FOODS, INC. OMNIBUS INCENTIVE PLAN

Shares of Restricted Stock: ____________

THIS AWARD, made as of the       day of __________, 20__, by Lifeway Foods,
Inc., an Illinois corporation (the “Company”), to ________________
(“Participant”), is made pursuant to and subject to the provisions of the
Company’s Omnibus Incentive Plan (the “Plan”).  All terms that are used herein
that are defined in the Plan shall have the same meanings given them in the
Plan.
 
1.   Award of Stock.  Pursuant to the Plan, the Company, on __________, 20__
(the “Date of Grant”), granted Participant, subject to the terms and conditions
of the Plan and subject further to the terms and conditions set forth herein, an
award of ______ shares of Common Stock, hereinafter described as “Restricted
Stock.”
 
2.   Restrictions.  Except as provided in this Notice of Award, the Restricted
Stock is nontransferable and is subject to a substantial risk of forfeiture.
 
3.   Stock Power. Participant shall deliver to the Company stock power
authorization(s), endorsed in blank, with respect to the Restricted Stock.  The
Company shall use the stock power to cancel any shares of Restricted Stock that
are forfeited (in accordance with Paragraph 7 below).  The Company shall return
the stock power to Participant with respect to any shares of Restricted Stock
that become Vested.
 
4.   Vesting.  Participant’s interest in the shares of Restricted Stock shall
become transferable and non-forfeitable (“Vested”) as of the ___ anniversary of
the Date of Grant, such that ______ shares of Restricted Stock will Vest on
__________, 20__. [ADJUST AS APPROPRIATE, VESTING MAY BE ON A 3-YEAR OR LONGER
GRADED OR CLIFF SCHEDULE]
 
5.   Death or Disability.  Paragraph 4 to the contrary notwithstanding, if
Participant dies or becomes Disabled while in the employ of the Company or an
Affiliate and prior to the forfeiture of the shares of Restricted Stock under
Paragraph 7, all shares of Restricted Stock that are not then Vested shall
become Vested as of the date of Participant’s death or of his becoming
Disabled.  For purposes of this Notice of Award, “Disabled” means a
Participant’s permanent and total disability within the meaning of Section
22(e)(3) of the Code. [ADJUST AS APPROPRIATE]
 
6.   Change in Control.  Notwithstanding any other provision of this Notice of
Award, upon a Change in Control ____________________________________. [COMPLETE
AS APPROPRIATE]
 
 
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7.   Forfeiture.  All shares of Restricted Stock that are not then Vested shall
be forfeited if Participant’s employment with the Company or an Affiliate
terminates for any reason other than by reason of Participant’s death or
Disability, or a Change in Control, as outlined in paragraphs 5 and 6.  [Specify
any other immediate vesting events.]
 
8.   Fractional Shares. Fractional shares shall not be issuable hereunder, and
when any provision hereof may entitle Participant to a fractional share such
fraction shall be disregarded.
 
9.   Shareholder Rights.  Participant will have the right to receive dividends
on and to vote the Restricted Stock as of the Date of Grant. The dividends paid
on the Restricted Stock will be immediately Vested and paid.  [ADJUST AS
APPROPRIATE]
 
10.      No Right to Continued Employment. Neither this Notice of Award nor the
issuance of Restricted Stock shall confer upon Participant any right with
respect to continuance of employment by the Company or an Affiliate, nor shall
it interfere in any way with the right of the Company or an Affiliate to
terminate his employment at any time.
 
11.          Change in Capital Structure.  In accordance with the terms of the
Plan, the terms of this grant shall be adjusted as the Committee determines is
equitable in the event the Company effects one or more stock dividends, stock
split-ups, subdivisions or consolidations of shares or other similar changes in
capitalization.
 
12.          Governing Law.  This Notice of Award shall be governed by the laws
of the State of Illinois.
 
13.          Conflicts.  In the event of any conflict between the provisions of
the Plan as in effect on the Date of Grant and the provisions of this Notice of
Award, the provisions of the Plan shall govern. All references herein to the
Plan shall mean the Plan as in effect on the Date of Grant.
 
14.          Participant Bound by Plan.  Participant hereby acknowledges receipt
of a copy of the Plan and agrees to be bound by all the terms and provisions
thereof.
 
15.          Binding Effect.  Subject to the limitations stated above and in the
Plan, this Notice of Award shall be binding upon and inure to the benefit of the
legatees, distributees, and personal representatives of the Participant and the
successors of the Company.
 
16.          Taxes.  The Company will withhold from the Restricted Stock the
number of shares of Common Stock necessary to satisfy Federal tax-withholding
requirements and state and local tax-withholding requirements with respect to
the state and locality designated by the Participant as their place of residence
in the Company's system of record at the time the Restricted Stock becomes
taxable, subject, however, to any special rules or provisions that may apply to
Participants who are non-US employees (working inside or outside of the United
States) or US employees working outside of the United States. It is the
Participant's responsibility to properly report all income and remit all
Federal, state, and local taxes that may be due to the relevant taxing
authorities as the result of receiving this award of Restricted Stock.
 
17.          Clawback.  [COMPLETE AS APPROPRIATE]
 
 
 
 
 
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IN WITNESS WHEREOF, the Company has caused this Notice of Award to be signed on
its behalf.
 
 
 
 

 
LIFEWAY FOODS, INC.

By    ___________________________________  

PARTICIPANT

_______________________________________

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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