Exhibit 10.42

 

DOUGLAS DYNAMICS, INC. 

AMENDED AND RESTATED 2010 STOCK INCENTIVE PLAN

GRANT NOTICE FOR RESTRICTED STOCK UNITS

FOR GOOD AND VALUABLE CONSIDERATION, Douglas Dynamics, Inc. (the “Company”),
hereby grants to Participant named below the number of restricted stock units
specified below (the “Award”), upon the terms and subject to the conditions set
forth in this Grant Notice, the Douglas Dynamics, Inc. Amended and Restated 2010
Stock Incentive Plan (the “Plan”) and the Standard Terms and Conditions (the
“Standard Terms and Conditions”) adopted under such Plan and provided to
Participant, each as amended from time to time.  Each restricted stock unit
subject to this Award represents the right to receive one share of the Company’s
common stock, par value $0.01 (the “Common Stock”), subject to the conditions
set forth in this Grant Notice, the Plan and the Standard Terms and
Conditions.  This Award is granted pursuant to the Plan and is subject to and
qualified in its entirety by the Standard Terms and Conditions.

Name of Participant: ______________________________

Grant Date: __________ __, 20__

Number of restricted stock units subject to the Award: __________

Vesting Schedule:       ________________________________________, subject to
Section 2 of the Standard Terms and Conditions

Dividend Equivalent Rights:  Yes _____        No ______

By accepting this Grant Notice, Participant acknowledges that he or she has
received and read, and agrees that this Award shall be subject to, the terms of
this Grant Notice, the Plan and the Standard Terms and Conditions.

 

 

 

 

DOUGLAS DYNAMICS, INC.

    

 

 

 

Participant Signature

By:

 

 

 

Title:

 

 

 

 

 

 

Address (please print)

 

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DOUGLAS DYNAMICS, INC.

STANDARD TERMS AND CONDITIONS FOR

RESTRICTED STOCK UNITS

These Standard Terms and Conditions apply to the Award of restricted stock units
granted pursuant to the Douglas Dynamics, Inc. Amended and Restated 2010 Stock
Incentive Plan (the “Plan”), which are evidenced by a Grant Notice or an action
of the Administrator that specifically refers to these Standard Terms and
Conditions.  In addition to these Terms and Conditions, the restricted stock
units shall be subject to the terms of the Plan, which are incorporated into
these Standard Terms and Conditions by this reference.  Capitalized terms not
otherwise defined herein shall have the meaning set forth in the Plan.

1.         TERMS OF RESTRICTED STOCK UNITS

Douglas Dynamics, Inc., a Delaware corporation (the “Company”), has granted to
the Participant named in the Grant Notice provided to said Participant herewith
(the “Grant Notice”) an award of a number of restricted stock units (the “Award”
or the “Restricted Stock Units”) specified in the Grant Notice.  Each Restricted
Stock Unit represents the right to receive one share of the Company’s common
stock, $0.01 par value per share (the “Common Stock”), upon the terms and
subject to the conditions set forth in the Grant Notice, these Standard Terms
and Conditions, and the Plan, each as amended from time to time.  For purposes
of these Standard Terms and Conditions and the Grant Notice, any reference to
the Company shall include a reference to any Subsidiary.

2.         VESTING OF RESTRICTED STOCK UNITS

The Award shall not be vested as of the Grant Date set forth in the Grant Notice
and shall be forfeitable unless and until otherwise vested pursuant to the terms
of the Grant Notice and these Standard Terms and Conditions.  After the Grant
Date, subject to termination or acceleration as provided in these Standard Terms
and Conditions and the Plan, the Award shall become vested as described in the
Grant Notice with respect to that number of Restricted Stock Units as set forth
in the Grant Notice.

Notwithstanding anything contained in these Standard Terms and Conditions to the
contrary:

A.        Subject to Section 10, if the Participant has a Termination of
Employment due to the Participant’s Retirement (as defined below) that occurs
six months or more after the first day of the fiscal year in which the Grant
Date occurs, the Restricted Stock Units shall continue to vest under the
schedule described in the Grant Notice. 

B.         If the Participant has a Termination of Employment by reason of death
or Disability before the Restricted Stock Units have vested, the Restricted
Stock Units shall fully vest upon such Termination of Employment. 

C.         If the Participant has a Termination of Employment for any reason
other than Retirement, death or Disability, any then unvested Restricted Stock
Units held by the

 

 

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Participant shall be forfeited and canceled as of the date of such Termination
of Employment. 

3.         SETTLEMENT OF RESTRICTED STOCK UNITS

Vested Restricted Stock Units shall be settled by the delivery to the
Participant or a designated brokerage firm of one share of Common Stock per
vested Restricted Stock Unit as soon as reasonably practicable following the
vesting of such Restricted Stock Units, and in all events no later than March 15
of the year following the year of vesting (unless delivery is deferred pursuant
to a nonqualified deferred compensation plan in accordance with the requirements
of Section 409A of the Code, and subject to applicable withholding).

4.         RIGHTS AS STOCKHOLDER

The Participant shall not have voting rights with respect to shares of Common
Stock underlying Restricted Stock Units unless and until such shares of Common
Stock are reflected as issued and outstanding shares on the Company’s stock
ledger.

5.         DIVIDEND EQUIVALENTS

To the extent the Grant Notice provides for dividend rights to apply to the
Award, the Participant shall receive a cash payment equivalent to any dividends
or other distributions paid with respect to the shares of Common Stock
underlying the Restricted Stock Units, so long as the applicable record date
occurs before such Restricted Stock Units are forfeited.  If, however, any
dividends or distributions with respect to the Common Stock underlying the
Restricted Stock Units are paid in Shares rather than cash, the Participant
shall be credited with additional restricted stock units equal to the number of
Shares that the Participant would have received had the Restricted Stock Units
been actual Shares, and such restricted stock units shall be deemed Restricted
Stock Units subject to the same risk of forfeiture and other terms of the Grant
Notice, these Standard Terms and Conditions and the Plan as are the other
Restricted Stock Units granted under this Award.  Any amounts due to the
Participant under this provision shall be paid to the Participant, in cash, no
later than the end of the calendar year in which the dividend or other
distribution is paid to stockholders  of the Company or, if later, the 15th day
of the third month following the date the dividends are paid to stockholders;
provided that, in the case of any distribution with respect to which the
Participant is credited with additional Restricted Stock Units, distribution
shall be made at the same time as payment is made in respect of the other
Restricted Stock Units granted under this Award.    

To the extent the Grant Notice provides that dividend rights will not apply to
the Award, the Participant shall not have dividend rights with respect to shares
of Common Stock underlying Restricted Stock Units unless and until such shares
of Common Stock are reflected as issued and outstanding shares on the Company’s
stock ledger.

6.         CHANGE OF CONTROL

The Restricted Stock Units shall be treated as follows if there is a Change of
Control:  

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A.        If the Restricted Stock Units are not continued, assumed or
substituted by the Participant’s employer (or an affiliate of such employer)
that employs the Participant immediately following the Change of Control, the
Restricted Stock Units shall fully vest upon the occurrence of the Change of
Control. For each Restricted Stock Unit, the Participant shall receive (i) the
consideration (whether stock, cash, or other securities or property) received in
the Change of Control by holders of Common Stock for each Share held on the
effective date of the Change of Control, (ii) common stock of the successor to
the Company with a value equal to the price at which a share of Common Stock is
valued in the Change of Control, or (iii) cash equal to the price at which a
share of Common Stock is valued in the Change of Control, as determined by the
Administrator in its discretion. 

B.         If the Restricted Stock Units are continued, assumed or substituted
by the Participant’s employer (or an affiliate of such employer) that employs
the Participant immediately following the Change of Control, the Restricted
Stock Units shall continue to vest as provided in the Grant Notice; provided,
however, that if the Participant’s employment is terminated other than for
Serious Misconduct (as defined below), or the Participant resigns for Good
Reason (as defined below), in either case within twenty-four (24) months
following the Change of Control, the Restricted Stock Units shall fully vest
upon such termination or resignation. 

For purposes hereof, the Restricted Stock Units shall be considered “assumed”
if, following the Change of Control, the Restricted Stock Units confer the right
to receive, for each share of Common Stock subject to the Restricted Stock Unit
immediately prior to the Change of Control, (i) the consideration (whether
stock, cash, or other securities or property) received in the Change of Control
by holders of Common Stock for each share held on the effective date of the
Change of Control, or (ii) common stock of the successor to the Company of
substantially equivalent economic value to the consideration received in the
Change of Control by holders of Common Stock for each share held on the
effective date of the Change of Control (as determined by the Administrator in
its discretion). The Restricted Stock Units will be considered “substituted for”
if the successor or acquiror replaces the Restricted Stock Units with equity
awards of substantially equivalent economic value measured as of the date the
Change of Control occurs (as determined by the Administrator in its discretion).

Notwithstanding the foregoing, to the extent that Section 409A of the Code
applies to the Restricted Stock Units, any such action shall be consistent with
the requirements of Section 409A of the Code.

7.         RESTRICTIONS ON RESALES OF SHARES

The Company may impose such restrictions, conditions or limitations as it
determines appropriate as to the timing and manner of any resales by the
Participant or other subsequent transfers by the Participant of any Common Stock
issued in respect of vested Restricted Stock Units, including without limitation
(a) restrictions under an insider trading policy, (b) restrictions designed to
delay and/or coordinate the timing and manner

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of sales by Participant and other holders and (c) restrictions as to the use of
a specified brokerage firm for such resales or other transfers.

8.         INCOME TAXES

The Company shall not deliver Shares or cash payments in respect of any
Restricted Stock Units or dividends (to the extent applicable to the
Award) unless and until the Participant has made arrangements satisfactory to
the Administrator to satisfy applicable withholding tax obligations.  In the
case of Shares, unless the Participant pays the withholding tax obligations to
the Company by cash or check in connection with the delivery of the Common
Stock, withholding may be effected, at the Company’s option, by withholding
Common Stock issuable in connection with the vesting of the Restricted Stock
Units (provided that shares of Common Stock may be withheld only to the extent
that such withholding will not result in adverse accounting treatment for the
Company).  The Participant acknowledges that the Company shall have the right to
deduct any taxes required to be withheld by law in connection with the delivery
of the Restricted Stock Units from any amounts payable by it to the Participant
(including, without limitation, future cash wages).  In the case of any cash
payments, the Company may withhold from such payments any amounts necessary to
satisfy withholding tax obligations.

9.         NON-TRANSFERABILITY OF AWARD

The Participant represents and warrants that the Restricted Stock Units are
being acquired by the Participant solely for the Participant’s own account for
investment and not with a view to or for sale in connection with any
distribution thereof.  The Participant further understands, acknowledges and
agrees that, except as otherwise provided in the Plan or as permitted by the
Administrator, the Restricted Stock Units may not be sold, assigned,
transferred, pledged or otherwise directly or indirectly encumbered or disposed
of.

10.       RESTRICTED ACTIVITIES 

A.        By accepting the Restricted Stock Units, the Participant acknowledges
and agrees that, any obligations of or restrictions on the Participant pursuant
to any separate Confidentiality and Noncompetition or similar agreement(s)
between the Participant and the Company shall be incorporated herein and be
deemed to apply to this Award, including any forfeiture or repayment obligations
described in Section F below.

B.         By accepting the Restricted Stock Units, the Participant acknowledges
and agrees that, during the vesting period under the Grant Notice, the
Participant will have access to and become acquainted with the Company’s and its
Affiliates’ confidential and proprietary information, including, but not limited
to, information or plans regarding the Company’s and its Affiliates’ customer
relationships, personnel, or sales, marketing, and financial operations and
methods; trade secrets; formulas; devices; secret inventions; processes; and
other compilations of information, records, and specifications (collectively
“Proprietary Information”). The Participant shall not disclose any of the
Company’s or any of its Affiliates’ Proprietary Information directly or
indirectly, or use it in any way, either during the vesting period under the
Grant Notice or at any time thereafter, except

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as required in the course of his employment or service with the Company or as
authorized in writing by the Company. All files, records, documents,
computer-recorded information, drawings, specifications, equipment and similar
items relating to the business of the Company or any of its Affiliates, whether
prepared by the Participant or otherwise coming into the Participant’s
possession, shall remain the exclusive property of the Company or its
Affiliates, as the case may be, and shall not be removed from the premises of
the Company under any circumstances whatsoever without the prior written consent
of the Company, except when (and only for the period) necessary to carry out the
Participant’s duties in the course of the Participant’s employment or service,
and if removed shall be immediately returned to the Company upon any Termination
of Employment. Notwithstanding the foregoing, Proprietary Information shall not
include (i) information which is or becomes generally public knowledge or public
except through disclosure by the Participant in violation of these Standard
Terms and Conditions or other applicable agreements and (ii) information that
may be required to be disclosed by applicable law.

C.         By accepting the Restricted Stock Units, the Participant acknowledges
and agrees that, while employed by or in service with the Company and during any
vesting period following the Participant’s Retirement, the Participant will not
interfere with the business of the Company or any of its Affiliates by directly
or indirectly soliciting, attempting to solicit, inducing, or otherwise causing
any employee of the Company or any of its Affiliates to terminate his or her
employment in order to become an employee, consultant or independent contractor
to or for any other employer.

D.        By accepting the Restricted Stock Units, the Participant acknowledges
and agrees that, while employed by or in service with the Company and during any
vesting period following the Participant’s Retirement, the Participant will not,
without the prior consent of the Company, directly or indirectly, have an
interest in, be employed by, or be connected with, as an employee, consultant,
officer, director, partner, stockholder or joint venturer, in any person or
entity owning, managing, controlling, operating or otherwise participating or
assisting in any business which is in competition with the business of the
Company or any of its Affiliates (i) during the vesting period under the Grant
Notice prior to the Participant’s Retirement, in any location, and (ii) during
the vesting period under the Grant Notice following the Participant’s
Retirement, in any country in which the Company or any of its Affiliates was
conducting business at the date of the Participant’s Termination of Employment
and continues to do so thereafter; provided, however, that the foregoing shall
not prevent the Participant from being a stockholder of less than 1% of the
issued and outstanding securities of any class of a corporation listed on a
national securities exchange.

E.         By accepting the Restricted Stock Units, the Participant acknowledges
and agrees that, while employed by or in service with the Company and during any
vesting period following the Participant’s Retirement, the Participant shall
not directly or indirectly make, repeat or publish any false, disparaging,
negative, unflattering, accusatory, or derogatory remarks or references, whether
oral or in writing, concerning the Company, any of its Affiliates or any of its
or their respective products, services, affiliates, subsidiaries, officers,
directors, employees or stockholders.  

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F.         By accepting the Restricted Stock Units, the Participant acknowledges
and agrees that (i) the provisions of Section 2 providing for the continued
vesting of the Restricted Stock Units upon Retirement and this Section 10 are
mutually dependent and not severable, and (ii) the Company would not provide for
the continued vesting of the Restricted Stock Units upon Retirement as provided
for in Section 2 but for the Participant’s promises set out in and the
enforceability of this Section 10. Accordingly, if the Participant fails to
comply with this Section 10 or any part thereof, or if Section 10 or any part
thereof is ever declared to be illegal, invalid, or otherwise unenforceable in
any respect by a court of competent jurisdiction, then the Participant agrees
that (x) the Restricted Stock Units held by the Participant that have not been
settled shall immediately be forfeited and canceled (regardless of whether then
vested or unvested) and (y) with respect to any Restricted Stock Units that have
been settled, the Participant shall immediately pay to the Company the fair
market value of the Shares associated with the settlement of the Restricted
Stock Units at the time of vesting; provided that if the scope of the
restrictions in this Section 10 as to time, geography, or scope of activities
are deemed by court of competent jurisdiction to exceed the limitations
permitted by applicable law, the Participant and the Company agree that the
restrictions so deemed shall be, and are, automatically reformed to the maximum
limitation permitted by such law. 

11.       RECOUPMENT

This Award, and any Shares issued or cash paid pursuant to this Award, shall be
subject to any recoupment, clawback or compensation recovery policy that is
adopted by the Company or otherwise made applicable by law, regulation or
listing standards, from time to time.  Accordingly, if the Administrator
determines that recoupment of incentive compensation paid pursuant to this Award
is required under any law, listing standard or any recoupment policy of the
Company, then this Award will terminate immediately on the date of such
determination to the extent required by such law, listing standard or recoupment
policy and the Administrator may recoup any such incentive compensation in
accordance with such recoupment policy or as required by law or listing
standard.  The Company shall have the right to offset against any other amounts
due from the Company to the Participant the amount owed by the Participant
hereunder.

12.       OTHER AGREEMENTS SUPERSEDED

The Grant Notice, these Standard Terms and Conditions and the Plan constitute
the entire understanding between the Participant and the Company regarding the
Restricted Stock Units.  Any prior agreements, commitments or negotiations
concerning the Restricted Stock Units are superseded.

13.       LIMITATION OF INTEREST IN SHARES SUBJECT TO RESTRICTED STOCK UNITS

Neither the Participant (individually or as a member of a group) nor any
beneficiary or other person claiming under or through the Participant shall have
any right, title, interest, or privilege in or to any shares of Common Stock
allocated or reserved for the purpose of

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the Plan or subject to the Grant Notice or these Standard Terms and Conditions
except as to such shares of Common Stock, if any, as shall have been issued to
such person upon vesting of the Restricted Stock Units.  Nothing in the Plan, in
the Grant Notice, these Standard Terms and Conditions or any other instrument
executed pursuant to the Plan shall confer upon the Participant any right to
continue in the Company’s employ or service nor limit in any way the Company’s
right to terminate the Participant’s employment at any time for any reason

14.       DEFINITIONS 

For purposes hereof, the following terms shall have the following meanings:

A.        “Confidential Information” shall mean, without limitation, all
documents or information, in whatever form or medium, or consisting of knowledge
or “know-how” whether or not recorded in any medium, concerning or evidencing
sales; costs; pricing; strategies; forecasts and long range plans; financial and
tax information; personnel information (including without limitation
compensation, other terms of employment, or performance other than as concerns
solely the Participant); business, marketing and operational projections, plans,
and opportunities; and customer, vendor, and supplier information; but excluding
any such information that is or becomes generally available to the public other
than as a result of any unauthorized disclosure or breach of duty by the
Participant. 

B.         “Good Reason” shall mean the Participant’s Termination of Employment
from the Company or its successor within sixty (60) days following the
occurrence of (i) a material reduction in the Participant’s base salary; (ii) a
material adverse change in the Participant’s responsibilities; or (iii) a
required relocation of the Participant’s principal place of employment by more
than thirty-five (35) miles from its location as in effect immediately prior to
the Change of Control; provided, that the Participant shall have provided
written notice to the Company or its successor of his or her intention to resign
for Good Reason and the grounds therefor within thirty (30) days following the
occurrence of the event constituting Good Reason, and the Company shall have
failed to cure such event within thirty (30) days of receiving such notice. 

C.         “Retirement” shall mean the Participant’s voluntary Termination of
Employment from the Company after the earlier of (i) the date on which the
Participant attains age sixty-five (65) or (ii) the date on which the
Participant has attained age fifty-five (55) and at least ten (10) years of
continuous service with the Company. 

D.        “Serious Misconduct” shall mean the occurrence of any of the
following: (i) any willful, intentional or grossly negligent act by the
Participant having the effect of materially injuring the interest, business or
prospects of the Company or its successor or any of their Affiliates; (ii) the
material violation or material failure by the Participant to comply with the
Company’s or its successor’s material published rules, regulations or policies,
as in effect from time to time; (iii) the Participant’s conviction of a felony
offense or conviction of a misdemeanor offense involving moral turpitude, fraud,
theft or dishonesty; (iv) any willful or intentional misappropriation or
embezzlement of the

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property of the Company or its successor or any of their Affiliates; or (v) a
material breach of Section 10 above by the Participant; provided, however, that
in the event that the Company or its successor determines to terminate the
Participant’s employment pursuant to clauses (ii) or (v) of this definition of
Serious Misconduct, such termination shall only become effective if the Company
or its successor shall first give the Participant written notice of such Serious
Misconduct, which notice shall identify in reasonable detail the manner in which
the Company or its successor believes Serious Misconduct to exist and indicates
the steps required to cure such Serious Misconduct, if curable, and the
Participant shall fail within thirty (30) days of such notice to substantially
remedy or correct the same. 

15.       GENERAL

In the event that any provision of these Standard Terms and Conditions is
declared to be illegal, invalid or otherwise unenforceable by a court of
competent jurisdiction, such provision shall be reformed, if possible, to the
extent necessary to render it legal, valid and enforceable, or otherwise
deleted, and the remainder of these Standard Terms and Conditions shall not be
affected except to the extent necessary to reform or delete such illegal,
invalid or unenforceable provision.

The headings preceding the text of the sections hereof are inserted solely for
convenience of reference, and shall not constitute a part of these Standard
Terms and Conditions, nor shall they affect its meaning, construction or effect.

These Standard Terms and Conditions shall inure to the benefit of and be binding
upon the parties hereto and their respective permitted heirs, beneficiaries,
successors and assigns.

These Standard Terms and Conditions shall be construed in accordance with and
governed by the laws of the State of Delaware, without regard to principles of
conflicts of law.

In the event of any conflict between the Grant Notice, these Standard Terms and
Conditions and the Plan, the Grant Notice and these Standard Terms and
Conditions shall control.  In the event of any conflict between the Grant Notice
and these Standard Terms and Conditions, the Grant Notice shall control.

All questions arising under the Plan or under these Standard Terms and
Conditions shall be decided by the Administrator in its total and absolute
discretion.

16.       ELECTRONIC DELIVERY

By executing the Grant Notice, the Participant hereby consents to the delivery
of information (including, without limitation, information required to be
delivered to the Participant pursuant to applicable securities laws) regarding
the Company and the Subsidiaries, the Plan, and the Restricted Stock Units via
Company web site or other electronic delivery.

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