Exhibit 10.1
EDDIE BAUER HOLDINGS, INC.
STOCK ONLY STOCK APPRECIATION RIGHT AGREEMENT
     This Stock Only Stock Appreciation Right Agreement (this “Agreement”), is
made and entered into as of                      (the “Date of Grant”), by and
between Eddie Bauer Holdings, Inc., a Delaware corporation (the “Company”), and
NAME (“Grantee”).
R E C I T A L S
     A. Capitalized terms used herein shall have the definitions as provided
herein or in the 2007 Amendment and Restatement of the Eddie Bauer Holdings,
Inc. 2005 Stock Incentive Plan.
AGREEMENT
     In consideration of the covenants and promises contained herein and other
good and valuable consideration, the sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
     1. Grant.
          (a) The Company hereby grants to Grantee                      stock
only stock appreciation rights (“SOSAR”) at an exercise price of
$                     under and subject to the 2007 Amendment and Restatement of
the Eddie Bauer Holdings, Inc. 2005 Stock Incentive Plan (the “Plan”). The SOSAR
is the right to receive a number of shares of the Company’s Common Stock
determined by taking the difference between (x) the closing price of the Common
Stock on the Date of Grant multiplied by the number of SOSARs, and (y) the
closing price of the Common Stock on the date of exercise, multiplied by the
number of SOSARs. The Grantee will receive a number of shares of the Common
Stock equal to the difference between the two amounts [(x) and (y) above],
divided by the closing price of the Common Stock on the date of exercise. This
SOSAR is not intended to qualify as an “incentive stock option” within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
“Code”).
          (b) The Company shall, in accordance with the Plan, establish and
maintain a stock account for the Grantee, and such account shall be credited for
the number of SOSARs granted to the Grantee. The stock account shall be credited
for any securities or other property (including regular cash dividends)
distributed by the Company in respect of its Common Stock. Any such property
shall be subject to the same vesting schedule as the SOSARs to which they
relate.
          (c) Until the SOSARs awarded to the Grantee shall have vested and
become payable as specified in this Agreement, the SOSARs and any related
securities, cash dividends or other property nominally credited to a Stock
account may not be sold, transferred, or otherwise disposed of and may not be
pledged or otherwise hypothecated.
     2. Exercise Period; Vesting. Unless expired as provided in Section 3 or
terminated as provided in Section 4 of this Agreement, this SOSAR may be
exercised from time to time after the Date of Grant set forth above to the
extent the SOSAR has vested in accordance with the vesting schedule set forth
below. The shares of Common Stock (the “Shares”) issued upon exercise of the
SOSAR will be subject to the restrictions on transfer set forth in Section 9
below. Provided Grantee continues to provide continuous services as an employee,
director or consultant (“Continuous Service”) to the Company or any affiliate,
the SOSAR will become vested as follows:

              Percentage of Vesting Date   Shares Vested
1st Anniversary
    25 %
2nd Anniversary
    50 %
3rd Anniversary
    75 %
4th Anniversary
    100 %

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A vested SOSAR may not be exercised for less than a full Share. If application
of the vesting percentage causes a fractional Share to otherwise become
exercisable, such Share shall be rounded down to the nearest whole Share for
each year except for the last year in such vesting period, at the end of which
vesting period the SOSAR shall become exercisable for the full remainder of the
unexercised Shares subject to the SOSAR. Upon the occurrence of a Change in
Control, upon retirement on or after age 65 and in the event of death or
Disability, the SOSAR shall become 100% vested and exercisable. Except as
otherwise provided in this Section, if the Grantee ceases Continuous Service for
any other reason, the unvested portion of the SOSAR shall be forfeited
immediately.
     3. Expiration. The SOSAR shall expire on                      (the
“Expiration Date”) or earlier as provided in Section 4 below. It is the
responsibility of the Grantee to exercise his/her rights under this Agreement
prior to the expiration date.
     4. Termination of Continuous Service.
          (a) Termination for Cause. If the Grantee’s Continuous Service is
terminated for Cause, all outstanding SOSARs granted to such Grantee shall be
forfeited and expire as of the beginning of business on the date of such
termination of Continuous Service. The Administrator, in its absolute
discretion, shall determine the effect of all matters and questions relating to
whether Grantee has been discharged for Cause.
          (b) Termination for Any Reason (other than For Cause) Including
Retirement at or after Age 55 with at least 10 Years of Service If Grantee’s
Continuous Service is terminated for any reason other than Cause, including
Retirement at or after age 55 with at least 10 years of service, the unvested
portion of the SOSAR shall be forfeited and expire at the close of business on
the date of such termination. The SOSAR, to the extent (and only to the extent)
that it would have been exercisable by Grantee immediately prior to such
termination of Continuous Service, may be exercised by Grantee until the earlier
of the Expiration Date or the date that is three months following the
termination of the Grantee’s Continuous Service and the SOSAR shall thereafter
terminate and cease to be exercisable.
          (c) Termination Because of Retirement on or after Age 65, Death or
Disability. Upon Retirement on or after age 65, death or Disability of the
Grantee, the SOSAR shall become 100% vested. If Grantee’s Continuous Service is
terminated because of Retirement on or after age 65, death or Disability of
Grantee, the SOSAR, to the extent exercisable by Grantee on the date of
termination, may be exercised by Grantee (or Grantee’s legal representative) no
later than 12 months after the date of termination, but in any event no later
than the Expiration Date.
          (d) Termination Under Change in Control. If the Grantee’s Continuous
Service is terminated as a result of a Change in Control, the SOSAR shall become
100% vested. The SOSAR, to the extent (and only to the extent) that it would
have been exercisable by Grantee immediately prior to such termination of
Continuous Service, may be exercised by Grantee until the earlier of the
Expiration Date or the date that is three months following the termination of
the Grantee’s Continuous Service and the SOSAR shall thereafter terminate and
cease to be exercisable.
          (e) Extension of Termination Date. If the exercise of the SOSAR
following the termination of the Grantee’s Continuous Service (other than upon
the Grantee’s Retirement on or after age 65, death or Disability) would be
prohibited at any time solely because the exercise of the SOSAR or issuance of
Shares of Common Stock would violate the registration requirements under the
Securities Act or any other state or federal securities law requirement, then
the SOSARs shall terminate on the earlier of (a) the Expiration Date, or (b) the
expiration of a period after termination of the Grantee’s Continuous Service
that is three months after the end of the period during which the exercise of
the SOSAR would be in violation of such registration or other securities law
requirements.

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          (f) No Obligation to Employ. Nothing in the Plan or this Agreement
shall confer on Grantee any right to continue in the employ of, or other
relationship with, the Company or any affiliate, or limit in any way the right
of the Company or any affiliate to terminate Grantee’s employment or other
relationship at any time, with or without Cause.
     5. Manner of Exercise.
          (a) Stock Only Stock Appreciation Right Exercise Notice and
Representations. To exercise this SOSAR, Grantee (or in the case of exercise
after Grantee’s death or incapacity, Grantee’s executor, administrator, heir or
legatee, as the case may be) must deliver to the Company an executed Stock Only
Stock Appreciation Right Exercise Notice and Representations in the form
attached hereto as Exhibit A, or in such other form as may be approved by the
Administrator from time to time (the “Exercise Notice”), which shall include the
following: (i) Grantee’s election to exercise the SOSAR, (ii) the number of
SOSARs exercised (iii) the date of grant of such SOSARs; provided, however, if
no date of grant is specified, the earliest granted, vested and exercisable
SOSAR will be subject to the Exercise Notice; (iv) the account information for
book entry of the Shares to Grantee’s account; and (v) any representations
warranties and agreements regarding Grantee’s investment intent and access to
information as may be required by the Company to comply with applicable
securities laws. Grantee shall not exercise SOSARs during a blackout period to
the extent prohibited by the Company’s Insider Trading Policy. The Administrator
shall have three business days after the date of receipt of the Exercise Notice
to complete the book entry of the Shares. If someone other than Grantee
exercises the SOSARs, then such person must submit documentation reasonably
acceptable to the Company verifying that such person has the legal right to
exercise the SOSAR.
          (b) Limitations on Exercise. The SOSAR may not be exercised unless
such exercise is in compliance with all applicable federal and state securities
laws, as they are in effect on the date of exercise. The SOSAR may not be
exercised for less than one Share or for a fractional Share. If a fractional
Share would otherwise become exercisable, such Share shall be rounded down to
the nearest whole Share for each year except for the last year of the applicable
vesting period, at the end of which vesting period this SOSAR shall become
exercisable for the full remainder of the unexercised Shares subject to the
SOSAR.
          (c) Payment. All payments made under this Agreement shall be in Shares
of Common Stock of the Company determined as provided in Section 1(a), above.
The Administrator shall have three business days after the date of receipt of
the Exercise Notice to complete the book entry of the Shares.
          (d) Tax Withholding. Prior to the payment of Shares upon exercise of
the SOSAR, Grantee must pay or provide for the payment of any applicable
federal, state and local withholding obligations of the Company. If the
Administrator permits, Grantee also may provide for payment of withholding taxes
upon exercise of the SOSAR by one or more of the following means, or combination
thereof: (i) tendering a cash payment; (ii) (ii) tendering previously acquired
shares of Common Stock with a fair market value, as determined by the
Administrator in a manner consistent with the Plan, equal to or less than the
minimum statutory amount of taxes required to be withheld by law, or (iv) by
requesting that the Company retain Shares from the Shares otherwise issuable to
the Grantee as a result of the exercise of this SOSAR, provided that no Shares
are withheld with a fair market value, as determined by the Administrator in a
manner consistent with the Plan, exceeding the minimum statutory amount of taxes
required to be withheld by law (“Share Withholding”). In such case, the Company
shall issue the net number of Shares to the Grantee by deducting the Shares
retained from the Shares issuable upon exercise. Payment of the tax withholding
by a Grantee who is an officer, director or other “insider” subject to Section
16(b) of the Exchange Act by a tender of Common Stock or in the form of Share
Withholding is subject to pre-approval by the Administrator, in its sole
discretion, in a manner that complies with the specificity requirements of
Rule 16b-3 under the Exchange Act, including the name of the Grantee involved in
the transaction, the nature of the transaction, the number of shares to be
acquired or disposed of by the Grantee and the material terms of the SOSARs
involved in the transaction.
          (e) Issuance of Shares. Provided that the Exercise Notice and
circumstances are in form and substance satisfactory to counsel for the Company,
the Company shall issue the Shares registered in the name of Grantee, Grantee’s
authorized assignee, or Grantee’s legal representative, and shall deliver by
book entry or otherwise the certificates representing the Shares with the
appropriate legends affixed thereto.

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     6. Compliance with Laws and Regulations. The issuance of Common Stock upon
exercise of the SOSAR shall be subject to compliance by the Company and the
Grantee with all applicable requirements of securities laws, other applicable
laws and regulations of any stock exchange or interdealer quotation system on
which the Common Stock may be listed at the time of such issuance or transfer.
The Grantee understands that the Company is under no obligation to register or
qualify the Common Stock with the Securities and Exchange Commission, any state
securities commission or any stock exchange to effect such compliance.
Regardless of whether the shares of Common Stock that may be issued pursuant to
this Agreement have been registered under the Securities Act or have been
registered or qualified under the securities laws of any state, the Company at
its discretion may impose restrictions upon the sale, pledge or other transfer
of such Common Stock (including the placement of appropriate legends on stock
certificates or the imposition of stop-transfer instructions) if, in the
judgment of the Company, such restrictions are necessary or desirable in order
to achieve compliance with the Securities Act, the securities laws of any state
or any other law. In connection with the grant or vesting of the SOSAR or the
issuance of Common Stock on exercise of such Grant, the Grantee will make or
enter into such written representations, warranties and agreements as the
Administrator may reasonably request in order to comply with applicable
securities laws or with this Agreement.
     7. Nontransferability of Stock Only Stock Appreciation Right. Except as
provided herein, this SOSAR may not be transferred in any manner other than by
will or by the laws of descent and distribution and may be exercised during the
lifetime of Grantee only by Grantee or in the event of Grantee’s incapacity, by
Grantee’s legal representative. The terms of the SOSAR shall be binding upon the
executors, administrators, successors and assigns of Grantee. This SOSAR may be
transferred by domestic relations order.
     8. Privileges of Stock Ownership. Grantee shall not have any of the rights
of a Stockholder with respect to any Shares until the Shares are issued to
Grantee.
     9. Restrictions On Transfer.
          (a) Securities Law Restrictions. Regardless of whether the offering
and sale of Shares under the Plan have been registered under the Securities Act
or have been registered or qualified under the securities laws of any state, the
Company at its discretion may impose restrictions upon the sale, pledge or other
transfer of Shares (including the placement of appropriate legends on stock
certificates or the imposition of stop-transfer instructions) if, in the
judgment of the Company, such restrictions are necessary or desirable in order
to achieve compliance with the Securities Act, the securities laws of any state
or any other law.
          (b) Market Stand-Off. If an underwritten public offering by the
Company of its equity securities occurs pursuant to an effective registration
statement filed under the Securities Act, including a secondary public offering
by the Company, the Grantee shall not sell, make any short sale of, loan,
hypothecate, pledge, grant any option for the repurchase of, transfer the
economic consequences of ownership or otherwise dispose or transfer for value or
otherwise agree to engage in any of the foregoing transactions with respect to
any Shares without the prior written consent of the Company or its underwriters,
for such period of time from and after the effective date of such registration
statement as may be requested by the Company or such underwriters (the “Market
Stand-Off”). In order to enforce the Market Stand-Off, the Company may impose
stop-transfer instructions with respect to the Shares acquired under this
Agreement until the end of the applicable stand-off period. If there is any
change in the number of outstanding shares of Common Stock by reason of a stock
split, reverse stock split, stock dividend, recapitalization, combination,
reclassification, dissolution or liquidation of the Company, any corporate
separation or division (including, but not limited to, a split-up, a split-off
or a spin-off), a merger or consolidation; a reverse merger or similar
transaction, then any new, substituted or additional securities which are by
reason of such transaction distributed with respect to any Shares subject to the
Market Stand-Off, or into which such Shares thereby become convertible, shall
immediately be subject to the Market Stand-Off.

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     10. Administration. The Compensation Committee of the Board or its duly
authorized delegate (the “Administrator”) shall have discretionary authority to
administer and interpret the terms of this Agreement. Any dispute regarding the
interpretation of this Agreement shall be submitted by Grantee or the Company to
the Administrator for review. The resolution of such a dispute by the
Administrator shall be final and binding on the Company and Grantee and all
other persons.
     11. Acceptance. Grantee hereby acknowledges receipt of a copy of this
Agreement. Grantee has read and understands the terms and provisions thereof,
and accepts the SOSAR subject to all the terms and conditions of this Agreement.
Grantee acknowledges that there may be adverse tax consequences upon exercise of
the SOSAR or disposition of the Shares and that Grantee should consult a tax
advisor prior to such exercise or disposition.
     12. Section 409A Limitation. In the event the Administrator determines at
any time that this SOSAR has been granted with an exercise price less than Fair
Market Value of the Shares subject to the SOSAR on the date the SOSAR is granted
(regardless of whether or not such exercise price is intentionally or
unintentionally priced at less than Fair Market Value, or is materially modified
at a time when the Fair Market Value exceeds the exercise price), or is
otherwise determined to constitute “nonqualified deferred compensation” within
the meaning of Section 409A of the Code, notwithstanding any provision of the
Plan or this SOSAR Agreement to the contrary, the SOSAR shall satisfy the
additional conditions applicable to nonqualified deferred compensation under
Section 409A of the Code, in accordance with Section 8 of the Plan. The
specified exercise date and term shall be the default date and term specified in
Section 8 of the Plan. Notwithstanding the foregoing, the Company shall have no
liability to Grantee or any other person if an SOSAR is determined to constitute
“nonqualified deferred compensation” within the meaning of Section 409A of the
Code and the terms of such SOSAR do not satisfy the additional conditions
applicable to nonqualified deferred compensation under Section 409A of the Code
and Section 8 of the Plan.
     13. No Right to Future Awards. This SOSAR grant is discretionary. This
Agreement does not confer on Grantee any right or entitlement to receive another
SOSAR grant or any other equity-based award at any time in the future or in
respect of any future period.
     14. Representations and Warranties of Grantee. The Grantee represents and
warrants to the Company that:
          (a) Agreement to Terms. The Grantee has received a copy of this
Agreement and has read and understands the terms of this Agreement, and agrees
to be bound by the terms and conditions. The Grantee acknowledges that there may
be adverse tax consequences upon the exercise of the SOSAR or disposition of the
shares and that the Grantee should consult a tax advisor prior to such time.
          (b) Cooperation. The Grantee agrees to sign such additional
documentation as may reasonably be required from time to time by the Company.
          (c) Securities Representations. In addition, the Grantee hereby makes
the following additional representations:
               (i) The Grantee is acquiring the shares of Common Stock for his
own account for investment purposes only and not with a view towards
distribution.
               (ii) The Grantee understands that the shares of Common Stock to
be issued under this Agreement may not be registered under the Securities Act or
under any state securities laws and therefore Grantee may not be able to dispose
of any of the Common Stock unless and until such shares are subsequently
registered under the Securities Act and applicable state securities laws or
exemptions from such registration are available.
               (iii) The Grantee understands that Rule 144 promulgated under the
Securities Act may indefinitely restrict transfer of the Common Stock so long as
the Grantee remains an “affiliate” of the Company or if “current public
information” about the Company (as defined in Rule 144) is not publicly
available.

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          (d) Obligation To Sell. Notwithstanding anything herein to the
contrary, if at any time following Grantee’s acquisition of shares of Common
Stock hereunder, stockholders of the Company owning 51% or more of the shares of
the Company (on a fully diluted basis) (the “Control Sellers”) enter into an
agreement (including any agreement in principal) to transfer all of their shares
to any person or group of persons who are not affiliated with the Control
Sellers, such Control Sellers may require each stockholder who is not a Control
Seller (a “Non-Control Seller”) to sell all of their shares to such person or
group of persons at a price and on terms and conditions the same as those on
which such Control Sellers have agreed to sell their shares, other than terms
and conditions relating to the performance or non-performance of services. For
the purposes of the preceding sentence, an affiliate of a Control Seller is a
person who controls, which is controlled by, or which is under common control
with, the Control Seller. Grantee agrees to honor any obligations Grantee may
have as a Non-Control Seller.
     15. Adjustment Upon Changes in Capitalization. If any change is made in the
Common Stock subject to the Grant, without the receipt of consideration by the
Company (through merger, consolidation, reorganization, recapitalization,
reincorporation, stock dividend, dividend in property other than cash, stock
split, liquidating dividend, combination of shares, exchange of shares, change
in corporate structure or other transaction not involving the receipt of
consideration by the Company), then the number and class of shares relating to
the SOSAR in effect prior to such change shall be proportionately adjusted by
the Administrator to reflect any increase or decrease in the number of issued
shares of Common Stock or change in the Fair Market Value of such Common Stock
resulting from such transaction; provided, however, that any fractional shares
resulting from the adjustment may be eliminated by a cash payment. The
Administrator shall make such adjustments in a manner that is intended to
provide an appropriate adjustment that neither increases nor decreases the value
of such Award as in effect immediately prior to such corporate change, and its
determination shall be final, binding and conclusive. The conversion of any
securities of the Company that are by their terms convertible shall not be
treated as a transaction “without receipt of consideration” by the Company. The
Administrator’s adjustment shall be effective, final, binding and conclusive for
all purposes of this Agreement.
     16. Miscellaneous Terms.
          (a) Notices. Any notice necessary under this Agreement shall be
addressed to the Company in care of its Manager of Compensation, with a copy to
the Company’s General Counsel, at the principal executive office of the Company
at 10401 NE 8th Street, Suite 500, Bellevue, WA 98004 and to the Grantee at the
address appearing in the records of the Company for the Grantee or to either
party at such other address as either party hereto may hereafter designate in
writing to the other. All notices shall be deemed to have been given or
delivered upon: (a) personal delivery; (b) five days after deposit in the United
States mail by certified or registered mail (return receipt requested); (c) two
business day after deposit with any return receipt express courier (prepaid); or
(d) one business day after transmission by facsimile.
          (b) Headings. The headings of sections and subsections are included
solely for convenience of reference and shall not affect the meaning of the
provisions of this Agreement.
          (c) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
          (d) Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto with regard to the subject matter hereof. It
supersedes all other agreements, representations or understandings (whether oral
or written and whether express or implied) that relate to the subject matter
hereof.
          (e) Interpretation. Any dispute regarding the interpretation of this
Agreement shall be submitted by Grantee or the Company to the Administrator for
review. The resolution of such a dispute by the Administrator shall be final and
binding on the Company and Grantee.
          (f) Successors and Assigns. The Company may assign any of its rights
under this Agreement. This Agreement shall be binding upon and inure to the
benefit of the successors and assigns of the Company. Subject to the
restrictions on transfer set forth herein, this Agreement shall be binding upon
Grantee and Grantee’s heirs, executors, administrators, legal representatives,
successors and assigns.

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          (g) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware without giving effect to
such state’s conflict of law principles. If any provision of this Agreement is
determined by a court of law to be illegal or unenforceable, then such provision
will be enforced to the maximum extent possible and the other provisions will
remain fully effective and enforceable.
     17. Amendment. The terms of this Agreement may not be altered or amended in
any manner that would impair the rights of the Grantee hereunder except by a
written instrument signed by the Company and the Grantee. Notwithstanding the
foregoing, if any provision of the Agreement contravenes Section 409A of the
Code, the Company may reform the Agreement or any provision hereof to maintain
to the maximum extent practicable the original intent of the provision without
violating the provisions of Section 409A.
[SIGNATURE PAGE FOLLOWS]

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     IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by
its duly authorized representative and Grantee has executed this Agreement, on
the dates indicated opposite their respective signatures, effective as of the
Date of Grant.

                                  EDDIE BAUER HOLDINGS, INC.    
 
                   
Date:
          By:        
 
 
 
         
 
McNeil S. Fiske, Jr., Chief Executive Officer    
 
                                GRANTEE    
 
                   
Date:
                                                  NAME, in his/ her individual
capacity    

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EXHIBIT A
FORM OF STOCK ONLY STOCK APPRECIATION RIGHT EXERCISE NOTICE AND REPRESENTATIONS
Date:                                                             
SOSAR EXERCISE NOTICE AND REPRESENTATIONS
Eddie Bauer Holdings, Inc.
10401 NE 8th Street
Bellevue, WA 98004
Attention: General Counsel
Ladies and Gentlemen:
     1. Stock Only Stock Appreciation Right. I was granted a Stock Only Stock
Appreciation Right (the “SOSAR”) to receive shares of the common stock (the
“Shares”) of Eddie Bauer Holdings, Inc., a Delaware corporation (the “Company”),
pursuant to the terms of my individual Stock Only Stock Appreciation Right
Agreement (the “Stock Only Stock Appreciation Right Agreement”) as follows:
          Date of SOSAR Grant:
                                                             
          Number of SOSARs:                                                     
        
     2. Exercise of SOSAR. I hereby elect to exercise the following number of
the above identified SOSARs, all of which are vested in accordance with the
Stock Only Stock Appreciation Right Agreement, to receive shares:

         
Total Shares Received:
       
 
 
 
   

     3. Tax Withholding. I authorize payroll withholding and otherwise will make
adequate provision for the federal, state, local and foreign tax withholding
obligations of the Company, if any, in connection with the SOSAR.

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     4. Grantee Information.
My address is:
     
 
     
 
Account Information:
Bank or Broker’s Name: ______________________________________
Name of My Account: ________________________________________
My Account Number: ________________________________________
Routing Information: _________________________________________
Contact Name at bank or brokerage and contact information: __________
     
 
My Social Security Number is:

     
 
     5. Binding Effect. I agree that the Shares are being acquired in accordance
with and subject to the terms, provisions and conditions of the Stock Only Stock
Appreciation Right Agreement set forth therein, to all of which I hereby
expressly assent. This Agreement shall inure to the benefit of and be binding
upon my heirs, executors, administrators, successors and assigns.
     6. Transfer. I understand and acknowledge that the Shares have not been
registered under the Securities Act of 1933, as amended (the “Securities Act”),
and that consequently the Shares must be held indefinitely unless they are
subsequently registered under the Securities Act, an exemption from such
registration is available, or they are sold in accordance with Rule 144 under
the Securities Act. I further understand and acknowledge that the Company is
under no obligation to register the Shares. I understand that the certificate or
certificates evidencing the Shares will be imprinted with legends which prohibit
the transfer of the Shares unless they are registered or such registration is
not required in the opinion of legal counsel satisfactory to the Company. I am
aware that Rule 144 under the Securities Act, which permits limited public
resale of securities acquired in a nonpublic offering, is not currently
available with respect to the Shares and, in any event, is available only if
certain conditions are satisfied. I understand that any sale of the Shares that
might be made in reliance upon Rule 144 may only be made in limited amounts in
accordance with the terms and conditions of such rule and that a copy of
Rule 144 will be delivered to me upon request.

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     I understand that I am purchasing the Shares pursuant to the terms of my
Stock Only Stock Appreciation Right Agreement, copies of which I have received
and carefully read and understand.

         
 
  Very truly yours,    
 
       
 
 
 
(Signature)    

[Acknowledgement on next page]
Receipt of the above is hereby acknowledged.
Eddie Bauer Holdings, Inc.

         
By:
       
Name:
 
 
   
Title:
 
 
   
 
 
 
   
 
       
Dated:
       
 
 
 
   

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