Exhibit 10.5
 
Generac Holdings Inc.
2010 Equity Incentive Plan
 
RESTRICTED STOCK AWARD AGREEMENT
 
ACCELERATED VESTING
 
THIS RESTRICTED STOCK AWARD AGREEMENT (this “Award Agreement”) is made effective
as of the ___ day of _________ (the “Date of Grant”), between Generac Holdings
Inc., a Delaware corporation (the “Company”), and ______________ (the
“Participant”):
 
R E C I T A L S:
 
WHEREAS, the Company has adopted the Generac Holdings Inc. 2010 Equity Incentive
Plan (the “Plan”), which Plan is incorporated herein by reference and made a
part of this Award Agreement.  Capitalized terms not otherwise defined herein
shall have the same meanings as in the Plan; and
 
WHEREAS, the Committee has determined that it would be in the best interests of
the Company and its stockholders to grant the restricted stock provided for
herein to the Participant pursuant to the Plan and the terms set forth herein.
 
NOW THEREFORE, in consideration of the mutual covenants hereinafter set forth,
the parties agree as follows:
 
1. Restricted Stock Award.  Subject to the terms and conditions of the Plan and
this Agreement, the Company hereby grants to the Participant _____ Shares (the
“Restricted Shares”), which shall vest and become nonforfeitable in accordance
with Section 3 hereof.
 
2. Certificates.  A certificate or certificates representing the Restricted
Shares shall be issued by the Company and shall be registered in the name of the
Participant on the stock transfer books of the Company promptly following
execution of this Award Agreement by the Participant, but shall remain in the
physical custody of the Company or its designee at all times prior to the
vesting of such Restricted Shares pursuant to Section 3 hereof.  As a condition
to the receipt of this Award Agreement, the Participant shall deliver to the
Company a Stock Power in the form attached hereto as Exhibit A, duly endorsed in
blank, relating to the Restricted Shares.  Each certificate representing the
Restricted Shares shall bear the following legend:
 
“The ownership and transferability of this certificate and these shares are
subject to the terms and conditions (including forfeiture) of the Generac
Holdings Inc. 2010 Equity Incentive Plan and a Restricted Stock Award Agreement
entered into between the registered owner and Generac Holdings Inc.  Copies of
such Plan and Agreement are on file in the executive offices of Generac Holdings
Inc.”
 
As soon as administratively practicable, but not later than sixty (60) days,
following the vesting of the Restricted Shares (as described in Section 3
hereof), and upon the satisfaction of all other applicable conditions,
including, but not limited to, the payment by the Participant of all applicable
withholding taxes, the Company shall deliver or cause to be delivered to the
Participant, or in the case of Participant’s death, Participant’s beneficiary, a
certificate or certificates for the applicable Shares of Restricted Stock which
shall not bear the legend described above, but may bear such other legends as
the Company deems advisable pursuant to Section 7 below.
 
3. Vesting of Restricted Stock.
 
(a) Vesting Schedule.  Subject to the Participant’s continued service through
the vesting date (i) fifty (50) percent of the Restricted Shares shall vest on
the fourth (4th) anniversary of the Date of Grant and (ii) fifty (50) percent of
the Restricted Shares shall vest on the fifth (5th) anniversary of the Date of
Grant.
 
(b) Acceleration of Vesting.
 
(i) Notwithstanding Section 3(a) hereof, if within the one (1) year period
following a Change of Control, the Participant’s service is terminated by the
Company or any Affiliate without Cause, the Restricted Shares shall immediately
vest as of the date of such termination of service, subject to the Participant’s
execution of an effective general release and waiver of all claims against the
Company, its Affiliates and their respective officers and directors,
substantially in the form attached hereto as Exhibit B.
 
(ii) Notwithstanding Section 3(a) hereof, subject to the Participant’s continued
service through the vesting date, if, within the three (3) year period following
the Date of Grant, the performance metrics set forth on Exhibit A are attained,
all of the Restricted Shares shall vest on the third (3rd) anniversary of the
Date of Grant.
 
(c) Termination of Service.  If the Participant’s Service is terminated for any
reason, other than as described in Section 3(b) above, the Restricted Shares, to
the extent not then-vested, shall be forfeited by the Participant without any
consideration.
 
(d) Definition of Cause.  “Cause” shall mean, (i) a material breach by the
Participant of any of the Participant’s obligations under any written agreement
with the Company or any of its Affiliates, (ii) a material violation by the
Participant of any of the Company’s policies, procedures, rules and regulations
applicable to employees generally or to similarly situated employees, in each
case, as they may be amended from time to time in the Company’s sole discretion;
(iii) the failure by the Participant to reasonably and substantially perform his
or her duties to the Company or its Affiliates (other than as a result of
physical or mental illness or injury); (iv) the Participant’s willful misconduct
or gross negligence that has caused or is reasonably expected to result in
material injury to the business, reputation or prospects of the Company or any
of its Affiliates; (v) the Participant’s fraud or misappropriation of funds; or
(vi) the commission by the Participant of a felony or other serious crime
involving moral turpitude; provided, that, in the case of the failures described
in (i), (ii) and (iii) above, such failures shall only constitute "Cause" after
a written notice of such failure is delivered to the Participant that
specifically identifies the specific failure that could lead to the
Participant's termination, and the Participant does not remedy such failure
within fifteen (15) business days after receipt of such written notice, as
prescribed within the notice.  Notwithstanding the foregoing, if the Participant
is a party to an employment agreement with the Company or any Affiliate at the
time of his or her termination of employment and such employment agreement
contains a different definition of “cause” (or any derivation thereof), the
definition in such employment agreement will control for purposes of this
Agreement.
 
4. Rights as a Stockholder.  The Participant shall have none of the rights of a
stockholder of the Company until the Restricted Shares vest, provided, that, the
Participant shall have the right to receive dividends on the Restricted Shares
(the “Dividends”) subject to the remainder of this Section 4.  The Dividends, if
any, shall be held by the Company and shall be subject to forfeiture until such
time that the Restricted Shares on which the Dividends were distributed vest in
accordance with Section 3 above.  The Dividends shall be released to the
Participant as soon as administratively practicable, but not later than the time
of delivery to the Participant, in accordance with Section 2 above, of
certificates representing the Restricted Shares on which the Dividends were
distributed.
 
5. Restrictive Covenant Agreement.  The Participant and the Company have
previously entered into a restrictive covenant agreement.  Participant hereby
reaffirms his obligations under such restrictive covenant agreement and nothing
contained in this Award Agreement shall cancel, change or modify Participant’s
obligations thereunder.
 
6. Non-Disparagement.  The Participant, while providing services to the Company
and thereafter, shall not make any oral or written communication to any Person
that disparages, or has the effect of damaging the reputation of, the Company,
the Affiliates or their respective directors, officers, agents, employees,
former employees, representatives or stockholders; provided, that, nothing in
the foregoing shall preclude the Participant from disclosing any information to
Participant’s attorney or in response to a lawful subpoena or court order
requiring disclosure of information.
 
7. Adjustment of Shares.  In the event of any corporate event or transaction (as
described in Section 12.1 of the Plan), the terms of this Award Agreement
(including, without limitation, the number and kind of Shares subject to this
Agreement) may be adjusted as set forth in Section 12.1 of the Plan.
 
8. No Right to Continued Service.  The granting of the Restricted Stock
evidenced hereby and this Award Agreement shall impose no obligation on the
Company or any Affiliate to continue the Service of the Participant and shall
not lessen or affect any right that the Company or any Affiliate may have to
terminate the service of such Participant.
 
9. Securities Laws/Legend on Certificates.  The issuance and delivery of Shares
shall comply (or be exempt from) all applicable requirements of law, including
(without limitation) the Securities Act of 1933, as amended, the rules and
regulations promulgated thereunder, state securities laws and regulations, and
the regulations of any stock exchange or other securities market on which the
Company’s securities may then be traded.  The Company shall not be obligated to
file any registration statement under any applicable securities laws to permit
the purchase or issuance of any Shares under the Plan or Awards, and accordingly
any certificates for Shares or documents granting Awards may have an appropriate
legend or statement of applicable restrictions endorsed thereon.  If the Company
deems it necessary to ensure that the issuance of Shares under the Plan is not
required to be registered under any applicable securities laws, each Participant
to whom such Shares would be issued shall deliver to the Company an agreement or
certificate containing such representations, warranties and covenants as the
Company may reasonably request which satisfies such requirements.
 
10. Transferability.  Unless otherwise provided by the Committee, the Restricted
Shares may not be assigned, alienated, pledged, attached, sold or otherwise
transferred or encumbered by the Participant other than by will or by the laws
of descent and distribution, and any such purported assignment, alienation,
pledge, attachment, sale, transfer or encumbrance shall be void and
unenforceable against the Company or any Affiliate; provided, that, the
designation of a beneficiary shall not constitute an assignment, alienation,
pledge, attachment, sale, transfer or encumbrance.  No such permitted transfer
of the Restricted Shares to heirs or legatees of the Participant shall be
effective to bind the Company unless the Committee shall have been furnished
with written notice thereof and a copy of such evidence as the Committee may
deem necessary to establish the validity of the transfer and the acceptance by
the transferee or transferees of the terms and conditions hereof.
 
11. Withholding.  The Participant may be required to pay to the Company or any
Affiliate and the Company shall have the right and is hereby authorized to
withhold, any applicable withholding taxes in respect of the Restricted Shares,
their vesting or transfer and to take such other action as may be necessary in
the opinion of the Committee to satisfy all obligations for the payment of such
withholding taxes.
 
12. Notices. Any notification required by the terms of this Award Agreement
shall be given in writing and shall be deemed effective upon personal delivery
or within three (3) days of deposit with the United States Postal Service, by
registered or certified mail, with postage and fees prepaid.  A notice shall be
addressed to the Company, Attention: General Counsel, at its principal executive
office and to the Participant at the address that he or she most recently
provided to the Company.
 
13. Entire Agreement.  This Award Agreement and the Plan constitute the entire
contract between the parties hereto with regard to the subject matter
hereof.  They supersede any other agreements, representations or understandings
(whether oral or written and whether express or implied) which relate to the
subject matter hereof.
 
14. Waiver.  No waiver of any breach or condition of this Award Agreement shall
be deemed to be a waiver of any other or subsequent breach or condition whether
of like or different nature.
 
15. Successors and Assigns.  The provisions of this Award Agreement shall inure
to the benefit of, and be binding upon, the Company and its successors and
assigns and upon the Participant, the Participant’s assigns and the legal
representatives, heirs and legatees of the Participant’s estate, whether or not
any such person shall have become a party to this Award Agreement and have
agreed in writing to be joined herein and be bound by the terms hereof.
 
16. Choice of Law.  This Award Agreement shall be governed by the law of the
State of Delaware (regardless of the laws that might otherwise govern under
applicable Delaware principles of conflicts of law) as to all matters, including
but not limited to matters of validity, construction, effect, performance and
remedies.
 
17. Restricted Shares Subject to Plan.  By entering into this Award Agreement
the Participant agrees and acknowledges that the Participant has received and
read a copy of the Plan.  The Restricted Shares are subject to the Plan.  The
terms and provisions of the Plan as it may be amended from time to time are
hereby incorporated herein by reference.  In the event of a conflict between any
term or provision contained herein and a term or provision of the Plan, the
applicable terms and provisions of the Plan will govern and prevail.
 
18. No Guarantees Regarding Tax Treatment.  Participants (or their
beneficiaries) shall be responsible for all taxes with respect to the Restricted
Shares.  The Committee and the Company make no guarantees regarding the tax
treatment of the Restricted Shares.  Neither the Committee nor the Company has
any obligation to take any action to prevent the assessment of any tax under
Section 409A of the Code or Section 457A of the Code or otherwise and none of
the Company, any Subsidiary or Affiliate, or any of their employees or
representatives shall have any liability to a Participant with respect thereto.
 
19. Amendment.  The Committee may amend or alter this Award Agreement and the
Restricted Shares granted hereunder at any time, subject to the terms of the
Plan.
 
20. Section 83(b) Election.  In the event the Participant determines to make an
election with the Internal Revenue Service (the “IRS”) under Section 83(b) of
the Code and the regulations promulgated thereunder (the “83(b) Election”), the
Participant shall provide a copy of such form to the Company promptly following
its filing, which is required under current law to be filed with the IRS no
later than thirty (30) days after the Date of Grant of the Restricted
Shares.  The form for making an 83(b) Election is attached hereto as Exhibit
C.  The Participant is advised to consult with his or her own tax advisors
regarding the purchase and holding of the Restricted Shares, and the Company
shall bear no liability for any consequence of the Participant making an 83(b)
Election or failing to make an 83(b) Election.
 
21. Severability. The provisions of this Award Agreement are severable and if
any one or more provisions are determined to be illegal or otherwise
unenforceable, in whole or in part, the remaining provisions shall nevertheless
be binding and enforceable.
 
22. Signature in Counterparts.  This Award Agreement may be signed in
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
 
*           *           *
 
IN WITNESS WHEREOF, the parties hereto have executed this Award Agreement.
 
 
GENERAC HOLDINGS INC.
 
By:                                                             
 
Agreed and acknowledged as of the date first above written:
 
               
PARTICIPANT
 
EXHIBIT A
 
STOCK POWER1
 
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
Generac Holdings Inc. (the “Company”), _________________ (_____) shares of
common stock, par value $0.01 per share, of the Company standing in
his/her/their/its name on the books of the Company represented by Certificate
No. ________________ herewith and does hereby irrevocably constitute and appoint
________________________ his/her/their/its attorney-in-fact, with full power of
substitution, to transfer such shares on the books of the Company.
Dated:  __________________                                                      Signature:
________________________________
 
Print Name and Mailing Address
 
__________________________________________
 
__________________________________________
 
__________________________________________
 
Instructions:
Please do not fill in any blanks other than the signature line and printed name
and mailing address.  Please print your name exactly as you would like your name
to appear on the issued stock certificate(s).  The purpose of this assignment is
to enable the forfeiture of the shares without requiring additional signatures
on your part.

 
1 This stock power is not effective if executed in New York State.
 
EXHIBIT B
 
FORM OF RELEASE
 
A release is required as a condition for receiving the benefits provided
pursuant to the Restricted Stock Award Agreement between GENERAC HOLDINGS INC.
(the “Company”) and [__________] (“Participant”) dated [___________], (the
“Agreement”); thus, by executing this release (“Release”), you have advised us
that you hold no claims against the Company, its predecessors, successors or
assigns, affiliates, shareholders or members and each of their respective
officers, directors, agents and employees (collectively, the “Releasees”), and
by execution of this Release you agree to waive and release any such claims,
except relating to any compensation, severance pay and benefits described in any
written agreement between you and the Company.
 
You understand and agree that this Release will extend to all claims, demands,
liabilities and causes of action of every kind, nature and description
whatsoever, whether known, unknown or suspected to exist, which you ever had or
may now have against the Releasees in your capacity as an employee of the
Company, including, without limitation, any claims, demands, liabilities and
causes of action arising from your employment with the Releasees and the
termination of that employment, including any claims for severance or vacation
pay, business expenses, and/or pursuant to any federal, state, county, or local
employment laws, regulations, executive orders, or other requirements,
including, but not limited to, Title VII of the 1964 Civil Rights Act, the 1866
Civil Rights Act, the Age Discrimination in Employment Act as amended by the
Older Workers Benefit Protection Act, the Americans with Disabilities Act, the
Civil Rights Act of 1991, the Workers Adjustment and Retraining Notification Act
and any other local, state or federal fair employment laws, and any contract or
tort claims.
 
You understand and agree that this Release is intended to include all claims by
you or on your behalf alleging discrimination on the basis of race, sex,
religion, national origin, age, disability, marital status, or any other
protected status or involving any contract or tort claims based on your
termination from the Company.  It is also acknowledged that your termination is
not in any way related to any work-related injury.
 
It also is understood and agreed that the remedy at law for breach of the Award
Agreement, any restrictive covenant agreements between you and the Company,
and/or this Release shall be inadequate, and the Company shall be entitled to
injunctive relief in respect thereof.
 
Your ability to receive payments and benefits under the terms of the Award
Agreement will remain open for a 21-day period after your Termination Date to
give you an opportunity to consider the effect of this Release.  At your option,
you may elect to execute this Release on an earlier date.  Additionally, you
have seven days after the date you execute this Release to revoke it.  As a
result, this Release will not be effective until eight days after you execute
it.  We also want to advise you of your right to consult with legal counsel
prior to executing a copy of this Release.
 
Finally, this is to expressly acknowledge:
 
·  
You understand that you are not waiving any claims or rights that may arise
after the date you execute this Release.

 
·  
You understand and agree that the compensation and benefits described in the
Award Agreement offer you consideration greater than that to which you would
otherwise be entitled.

 
I hereby state that I have carefully read this Release and that I am signing
this Release knowingly and voluntarily with the full intent of releasing the
Releases from any and all claims, except as set forth herein.  Further, if
signed prior to the completion of the 21 day review period, this is to
acknowledge that I knowingly and voluntarily signed this Release on an earlier
date.
 
Date:
[___________]

 
EXHIBIT C
 
SECTION 83(b) ELECTION
 
This statement is being made under Section 83(b) of the Internal Revenue Code,
pursuant to Treas. Reg. Section 1.83-2.
 
(1)           The taxpayer who performed the services is:
 
Name:                                
 
Address:                                
 
Social Security Number:                                           
 
(2)
The property with respect to which the election is being made is _________
shares of the common stock, par value $0.01 per share, of Generac Holdings Inc.

 
(3)           The transferor of the property is Generac Holdings Inc.
 
(4)           The property was transferred on _____________________.
 
(5)           The taxable year in which the election is being made is the
calendar year ____.
 
(6)
The property will vest upon the third anniversary of the date of transfer,
subject to the taxpayer’s continued service to Generac Holdings Inc or its
affiliates.

 
(7)
The fair market value at the time of transfer (determined without regard to any
restriction other than a restriction which by its terms will never lapse) is
$___________ per share.

 
(8)           The amount paid for such property is $__________ per share.
 
(9)
A copy of this statement was furnished to Generac Holdings Inc. for whom
taxpayer rendered the services underlying the transfer of property.

 
(10)
This statement is executed on ________________.

 
Signature:
 
____________________
[Taxpayer’s name]
 
This election must be filed with the Internal Revenue Service Center with which
taxpayer files his Federal income tax returns and must be made within thirty
days after the Date of Grant.  This filing should be made by registered or
certified mail, return receipt requested.  The taxpayer shall also provide a
copy of such form to the Company promptly following its filing.  The taxpayer
should retain two (2) additional copies of the completed form for filing with
Federal and state tax returns for the taxpayer’s current tax year and an
additional copy for the taxpayer’s records.