Document:

Exh.10.1 LTIP Financial_Performance_Award_Agmt

DECKERS OUTDOOR CORPORATION
RESTRICTED STOCK UNIT AWARD AGREEMENT UNDER 
2006 EQUITY INCENTIVE PLAN 
2014 LTIP FINANCIAL PERFORMANCE AWARD
	
		
	Name of Grantee:
	 

	Grant Date:
	_____________, 2014

	Performance Period:
	April 1, 2016 to March 31, 2017

	Threshold Number of Units:
	 

	Target Number of Units:
	 

	Maximum Number of Units:
	 

In order to promote Grantee’s long-term commitment to Deckers Outdoor Corporation (the “Company”), to compensate Grantee for the Company’s performance measured on a long-term basis and to provide an incentive for Grantee to remain a Service Provider (as defined below) of the Company and to exert added effort towards its growth and success, the Company hereby grants an award (the “Award”) of restricted stock units (the “Restricted Stock Units”) set forth above, together with the Additional Restricted Stock Units (as defined in Section 1(b) below).
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”), subject to certain restrictions and on the terms and conditions contained in this Award and the Deckers Outdoor Corporation 2006 Equity Incentive Plan (the “Plan”).  Any terms not defined herein shall have the meaning set forth in the Plan.  The Threshold Number of Units (as listed above) is the minimum number of Restricted Stock Units to be settled in the event that the Company meets the threshold Performance Criteria as described in this Award.  The Maximum Number of Units (as listed above) is the total number of Restricted Stock Units that may be settled as described in this Award. 
1.Rights of the Grantee with Respect to the Restricted Stock Units.
(a)    No Stockholder Rights.  The Grantee shall have no rights as a stockholder of the Company until shares of Common Stock are actually issued to and held of record by the Grantee.  The rights of Grantee with respect to the Restricted Stock Units shall remain forfeitable at all times prior to the date on which such rights become vested, and the restrictions with respect to the Restricted Stock Units lapse, in accordance with Sections 2, 3 or 4 below.  

(b)    Additional Restricted Stock Units.  As long as Grantee holds Restricted Stock Units granted pursuant to this Award, the Company shall credit to Grantee, on each date that the Company pays a cash dividend to holders of Common Stock generally, an additional number of Restricted Stock Units (“Additional Restricted Stock Units”) equal to the Target Number of Units and Additional Restricted Stock Units previously credited to Grantee under this Award multiplied by the dollar amount of the cash dividend paid per share of Common Stock by the Company on such date, divided by the Fair Market Value of a share of Common Stock on such date.  Any fractional Restricted Stock Unit resulting from such calculation shall be included in the Additional Restricted Stock Units.  A report showing the number of Additional Restricted Stock Units so credited shall be sent to Grantee periodically, as determined by the Company.  The Additional Restricted Stock Units so credited shall be subject to the same terms and conditions as the Restricted Stock Units to which such Additional Restricted Stock Units relate and the Additional Restricted Stock Units shall be forfeited in the event that the Restricted Stock Units with respect to which such Additional Restricted Stock Units were credited are forfeited.
(c)    Conversion of Restricted Stock Units; Issuance of Common Stock.  No shares of Common Stock shall be issued to Grantee prior to the date on which the Restricted Stock Units have become earned and vested.  Neither this Section 1(c) nor any action taken pursuant to or in accordance with this Section 1(c) shall be construed to create a trust of any kind.  As soon as practical after any Restricted Stock Units have become earned and vested as described herein, the Company shall promptly cause to be issued an equivalent number of shares of Common Stock, registered in Grantee’s name or in the name of Grantee’s legal representatives, beneficiaries or heirs, as the case may be, in payment of such vested whole Restricted Stock Units and any Additional Restricted Stock Units.  Such payment shall be subject to the tax withholding provisions of Section 8, and shall be in complete satisfaction of such vested Restricted Stock Units.  The value of any fractional Restricted Stock Unit shall be paid in cash at the time certificates are delivered to Grantee in payment of the Restricted Stock Units and any Additional Restricted Stock Units. 
2.    Vesting.  
(a)    The Restricted Stock Units shall vest, and the right to receive shares of Common Stock pursuant to the Restricted Stock Units shall be based upon the achievement by the Company of the performance criteria as set forth on Exhibit A (“Performance Criteria”) over the Performance Period (as defined above), provided that the Grantee shall have provided Continuous Service to the Company through March 31, 2017 (the “Vesting Date”).  Within 30 business days following the Vesting Date and subject to the Committee’s final determination of the achievement of the Performance Criteria, the Company shall deliver to the Grantee one share for each Restricted Stock Unit in which Grantee becomes entitled as described herein and such Restricted Stock Unit shall terminate.  Except as expressly set forth herein, no additional Restricted Stock Units shall vest after the date of termination of Grantee’s “Continuous Service” (as defined below).
(b)    As used herein, the term “Continuous Service” means (i) employment by either the Company or any parent or subsidiary corporation of the Company, or by any successor entity following a Change in Control, which is uninterrupted except for vacations, illness, or leaves of absence which are approved in writing by the Company or any of such other employer corporations, if applicable, or (ii) service as a member of the Board of Directors of the Company until Grantee resigns, is removed from office, or Grantee’s term of office expires and he or she is not reelected, (iii) or so long as engaged as a Consultant or other Service Provider.  The Grantee’s Continuous Service shall not terminate merely 

because of a change in the capacity in which the Grantee renders service to the Company or a corporation or subsidiary corporation described in clause (i) above.  For example, a change in the Grantee’s status from an employee to a Non-Employee Director or Consultant will not constitute an interruption of the Grantee’s Continuous Service, provided there is no interruption in the Grantee’s performance of such services.  Notwithstanding the foregoing, for any employee of a subsidiary of the Company located outside the United States, such employee’s Continuous Service shall be deemed terminated upon the commencement of such employee’s “garden leave period,” “notice period,” or other similar period where such employee is being compensated by such subsidiary but not actively providing service to such subsidiary.
3.    Forfeiture or Early Vesting Upon Termination of Employment.  
(a)    Termination of Employment Generally.  If, prior to vesting of the Restricted Stock Units pursuant to Section 2 or 4, Grantee ceases to provide Continuous Service to the Company, then, except as otherwise provided in Section 3(b) or (c) below, or Section 4 below, Grantee’s rights to any of the Restricted Stock Units shall be immediately and irrevocably forfeited, including the right to receive any Additional Restricted Stock Units.
(b)    Vesting Upon Death or Disability.  Notwithstanding Section 3(a) above, if Grantee’s Continuous Service ceases due to Grantee’s death or disability (as defined in the Plan), then a Pro-Rata Portion (as defined in Section 4(c)(iv) below) of the Restricted Stock Units shall become vested effective the last day of the Performance Period, subject to and based upon achievement of the Performance Criteria as set forth in Exhibit A.  Promptly following the date of the Committee’s final determination of the achievement of the Performance Criteria, the Company shall deliver to the Grantee (or his/her estate in the event of death) one share for each Restricted Stock Unit in which Grantee becomes entitled as described herein and such Restricted Stock Unit shall terminate.  No transfer by will or the applicable laws of descent and distribution nor any Restricted Stock Units that vest by reason of Grantee’s death shall be effective to bind the Company unless the Committee shall have been furnished with written notice of such transfer and a copy of the will or such evidence as the Committee may deem necessary to establish the validity of the transfer.
(c)    Vesting Upon Retirement.  Notwithstanding Section 3(a) above, if Grantee’s Continuous Service ceases due to Grantee’s Retirement (as defined in Section 4(c)(v) below), then a Pro-Rata Portion (as defined in Section 4(c)(iv) below) of the Restricted Stock Units shall become vested effective as of the last day of the Performance Period, subject to and based upon achievement of the Performance Criteria as set forth in Exhibit A; provided, however, that no vesting shall occur hereunder unless the Grantee complies with the provisions of Section 7 below throughout the remaining period of the Performance Period.   Promptly following the date of the Committee’s final determination of the achievement of the Performance Criteria, the Company shall deliver to the Grantee one share for each Restricted Stock Unit in which Grantee becomes entitled as described herein and such Restricted Stock Unit shall terminate.  
4.    Vesting Upon Change in Control.
(a)    Notwithstanding Section 2 above, if prior to completion of the Performance Period, Grantee holds Restrictive Stock Units at the time a Change in Control occurs, and either (i) the Change in Control is not approved by a majority of the Continuing Directors (as defined below), or (ii) the acquiring or successor entity (or parent thereof) does not agree to provide for the continuance or 

assumption of this Agreement or the substitution for this Agreement of a new agreement of comparable value covering shares of a successor corporation (“New Incentives”), then the Target Number of Units shall become immediately and unconditionally vested effective immediately prior to and conditioned upon the consummation of such Change in Control, regardless of the Performance Criteria, and the Company shall deliver to Grantee one share of Common Stock for each of the Target Number of Units and the Restricted Stock Units shall terminate.
(b)    Notwithstanding Section 4(a) above, if pursuant to a Change in Control approved by a majority of the Continuing Directors, the acquiring or successor entity (or parent thereof) provides for the continuance or assumption of this Agreement or the substitution for this Agreement of a new agreement of comparable value covering New Incentives, then vesting of the Restricted Stock Units shall not accelerate in connection with such Change in Control to the extent this Agreement is continued, assumed or substituted for New Incentives; provided, however: 
(i)    if Grantee’s Continuous Service is terminated without Cause or pursuant to a Constructive Termination (as defined below) within 12 months following such Change in Control, the Target Number of Units or New Incentives shall vest effective upon such termination, regardless of the Performance Criteria; or
(ii)    if, following a Change in Control, Grantee shall have provided Continuous Service through the end of the Performance Period, then the Target Number of Units or New Incentives shall vest effective as of the last day of the Performance Period, regardless of the Performance Criteria.
(c)    For purposes of this Agreement, the following terms shall have the meanings set forth below:
(i)    “Cause” means, with respect to a Grantee’s Continuous Service, the termination by the Company of such Continuous Service for any of the following reasons: (a) The continued, unreasonable refusal or omission by the Grantee to perform any material duties required of him by the Company if such duties are consistent with duties customary for the position held with the Company; (b) any material act or omission by the Grantee involving malfeasance or gross negligence in the performance of Grantee’s duties to, or material deviation from any of the policies or directives of, the Company; (c) conduct on the part of Grantee which constitutes the breach of any statutory or common law duty of loyalty to the Company, including the unauthorized disclosure of material confidential information or trade secrets of the Company; or (d) any illegal act by Grantee which materially and adversely affects the business of the Company or any felony committed by Grantee, as evidenced by conviction thereof, provided that the Company may suspend Grantee with pay while any allegation of such illegal or felonious act is investigated.  In the event that the Grantee is a party to an employment agreement or other similar agreement with the Company or any Affiliate that defines a termination on account of “Cause” (or a term having similar meaning), such definition shall apply as the definition of a termination on account of “Cause” for purposes hereof, but only to the extent that such definition provides the Grantee with greater rights.  A termination on account of Cause shall be communicated by written notice to the Grantee, and shall be deemed to occur on the date such notice is delivered to the Grantee.
(ii)    “Constructive Termination” shall mean a termination of employment by Grantee within sixty (60) days following the occurrence of any one or more of the following events 

without the Grantee’s written consent (i) any material reduction in overall responsibilities, base compensation, annual incentive compensation opportunity, aggregate employee benefits or (ii) a request that Grantee's location of employment be relocated by more than fifty (50) miles.  In the event that the Grantee is a party to an employment agreement or other similar agreement with the Company or any Affiliate (or a successor entity) that defines a termination on account of “Constructive Termination,” “Good Reason” or “Breach of Agreement” (or a term having a similar meaning), such definition shall apply as the definition of “Constructive Termination” for purposes hereof in lieu of the foregoing, but only to the extent that such definition provides the Grantee with greater rights.  A Constructive Termination shall be communicated by written notice to the Committee, and shall be deemed to occur on the date such notice is delivered to the Committee, unless the circumstances giving rise to the Constructive Termination are cured within five (5) days of such notice.
(iii)    “Continuing Director” means any member of the Board of Directors of the Company who was a member of the Board prior to the adoption of the Plan, and any person who is subsequently elected to the Board if such person is recommended or approved by a majority of the Continuing Directors.
(iv)    “Pro-Rata Portion” shall be determined by (A) multiplying the number of Restricted Stock Units earned under this Agreement at the conclusion of the Performance Period by (B) a fraction, the numerator of which is the number of full months of Grantee’s Continuous Service from April 1, 2014 until the date of termination  of Continuous Service, and the denominator of which is 36.
(v)     “Retirement” means both (i) attains age sixty-two (62) and (ii) completes ten (10) years of Continuous Service.
5.    Restriction on Transfer.  The Restricted Stock Units and any rights under this Award may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of by Grantee otherwise than by will or by the laws of descent and distribution, and any such purported sale, assignment, transfer, pledge, hypothecation or other disposition shall be void and unenforceable against the Company.  Notwithstanding the foregoing, Grantee may, in the manner established by the Committee, designate a beneficiary or beneficiaries to exercise the rights of Grantee and receive any property distributable with respect to the Restricted Stock Units upon the death of Grantee.
6.    Adjustments to Restricted Stock Units.  Upon or in contemplation of any reclassification, recapitalization, stock split, reverse stock split or stock dividend; any merger, combination, consolidation or other reorganization; any split-up, spin-off, or similar extraordinary dividend distribution in respect of the Common Stock (whether in the form of securities or property); any exchange of Common Stock or other securities of the Company, or any similar, unusual or extraordinary corporate transaction in respect of the Common Stock; or a sale of substantially all the assets of the Company as an entirety; then the Company shall, in such manner, make appropriate adjustments in the number of Restricted Stock Units subject to this Agreement and the number and kind of securities that may be issued in respect of such Units, as provided in Section 15 of the Plan.
7.    Restrictive Covenants.  This Section shall apply if Grantee’s employment is terminated pursuant to Section 4(c) during any period in which any Restricted Stock Units of the Grantee continue to vest in accordance with Section 4(c):

(a)    Non-Competition.  The Grantee shall not, without the Board’s prior written consent, directly or indirectly engage in, have any equity interest in, or assist, manage or participate in (whether as a director, officer, employee, agent, representative, security holder, consultant or otherwise) any Competitive Business; provided, however, that: (i) the Grantee shall be permitted to acquire a passive stock or equity interest in such a Competitive Business provided the stock or other equity interest acquired is not more than 5% of the outstanding interest in such a Competitive Business; (ii) the Grantee shall be permitted to acquire any investment through a mutual fund, private equity fund or other pooled account that is not controlled by the Grantee and in which he has less than a 5% interest and (iii) the Grantee shall be permitted serve on a Board of Directors of business that may compete in Competition with, business of the Company.  For purposes of this provision, the term “Competitive Business” a business or businesses activity which is the same as, substantially similar to, or in Competition with, business of the Company.
(b)    Non-Solicitation.  The Grantee will not, directly or indirectly, recruit or otherwise solicit or induce any non-clerical employee, director, consultant, customer, vendor or supplier of the Company to terminate his, her or its employment or arrangement with the Company or otherwise change his, her or its relationship with the Company.
(c)    Confidentiality.  The Grantee shall maintain in confidence and shall not directly, indirectly or otherwise, use, disseminate, disclose or publish, or use for his or her benefit or the benefit of any person, firm, corporation or other entity, any confidential or proprietary information or trade secrets of or relating to the Corporation, including, without limitation, information with respect to the Corporation’s operations, processes, products, inventions, business practices, finances, principals, vendors, suppliers, customers, potential customers, marketing methods, costs, prices, contractual relationships, business plans, designs, marketing or other business strategies, compensation paid to employees or other terms of employment, or deliver to any person, firm, corporation or other entity any document, record, notebook, computer program or similar repository of or containing any such confidential or proprietary information or trade secrets.  Notwithstanding anything herein to the contrary, nothing shall prohibit the Grantee from disclosing any information that is generally known by the public.
(d)    Non-Disparagement.  The Grantee will not criticize, defame, be derogatory toward or otherwise disparage the Company (or the Company’s past, present and future officers, directors, stockholders, attorneys, agents, representatives, employees or affiliates), or its or their business plans or actions, to any third party, either orally or in writing; provided, however, that this provision will not preclude the Grantee from giving testimony in response to a lawful subpoena or preclude any conduct protected under 18 U.S.C. Section 1514A(a) or any similar state or federal law providing “whistleblower” protection to the Grantee.
8.    Income Tax Matters.
(a)    In order to comply with all applicable federal or state income tax laws or regulations, the Company may take such action as it deems appropriate to ensure that all applicable federal or state payroll, withholding, income or other taxes, which are the sole and absolute responsibility of Grantee, are withheld or collected from Grantee.
(b)    The Company shall reasonably determine the amount of any federal, state, local or other income, employment, or other taxes which the Company or any of its affiliates may reasonably be obligated to withhold with respect to the grant, vesting, or other event with respect to the Restricted 

Stock Units.  The Company may, in its sole discretion, withhold a sufficient number of shares of Common Stock in connection with the vesting of the Restricted Stock Units at the Fair Market Value (as defined in the Plan) of the Common Stock (determined as of the date of measurement of the amount of income subject to such withholding) to satisfy the minimum amount of any such withholding obligations that arise with respect to the vesting of such Restricted Stock Units.  The Company may take such action(s) without notice to the Grantee, and the Grantee shall have no discretion as to the satisfaction of tax withholding obligations in such manner.  If, however, any withholding event occurs with respect to the Restricted Stock Units other than upon the vesting of such Units, or if the Company for any reason does not satisfy the withholding obligations with respect to the vesting of the Units as provided above in this Section 8(b), the Company shall be entitled to require a cash payment by or on behalf of the Grantee and/or to deduct from other compensation payable to the Grantee the minimum amount of any such withholding obligations.
(c)    The Restricted Stock Unit Award evidenced by this Agreement, and the issuance of shares of Common Stock to the Grantee in settlement of vested Units, is intended to be taxed under the provisions of Section 83 of the Internal Revenue Code of 1986, as amended (the “Code”), and is not intended to provide and does not provide for the deferral of compensation within the meaning of Section 409A(d) of the Code.  Therefore, the Company intends to report as includible in the Grantee’s gross income for any taxable year an amount equal to the Fair Market Value of the shares of Common Stock covered by the Units that vest (if any) during such taxable year, determined as of the date such Units vest.  In furtherance of this intended tax treatment, all vested Units shall be automatically settled and payment to the Grantee shall be made as provided in Section 1(c) hereof, but in no event later than March 15th of the year following the calendar year in which such Units vest.  The Grantee shall have no power to affect the timing of such settlement or payment.  The Company reserves the right to amend this Agreement, without the Grantee’s consent, to the extent it reasonably determines from time to time that such amendment is necessary in order to achieve the purposes of this Section.  
9.    Compliance with Laws.  The Award and the offer, issuance and delivery of securities under this Agreement are subject to compliance with all applicable federal and state laws, rules and regulations (including but not limited to state and federal securities laws) and to such approvals by any listing, regulatory or governmental authority as may, in the opinion of counsel for the Company, be necessary or advisable in connection therewith.  The Grantee will, if requested by the Company, provide such assurances and representations to the Company as the Company may deem necessary or desirable to assure compliance with all applicable legal requirements.  The Company will cause such action to be taken, and such filings to be made, so that the grant hereunder shall comply with the rules of the Nasdaq Stock Market or the principal stock exchange on which shares of the Company’s Common Stock are then listed for trading.
10.    No Agreement to Employ. Nothing in this Agreement shall affect any right with respect to continuance of employment by the Company or any of its subsidiaries.  The right of the Company or any of its subsidiaries to terminate at will the Grantee’s employment at any time (whether by dismissal, discharge or otherwise), with or without cause, is specifically reserved, subject to any other written employment agreement to which the Company and Grantee may be a party.
11.    Entire Agreement.  This Agreement and the Plan constitute the entire agreement between the parties with respect to the subject matter hereof and supersede all prior or contemporaneous written or oral agreements and understandings of the parties, either express or implied.

12.    Conflict of Provisions.  The terms contained in the Plan are incorporated into and made a part of this Agreement and this Agreement shall be governed by and construed in accordance with the Plan.  In the event of any actual or alleged conflict between the provisions of the Plan and the provisions of this Agreement, the provisions of the Plan shall be controlling and determinative.
13.    Assignment.  Grantee shall have no right, without the prior written consent of the Company, to (i) sell, assign, mortgage, pledge or otherwise transfer any interest or right created hereby, or (ii) delegate his or her duties or obligations under this Agreement.  This Agreement is made solely for the benefit of the parties hereto, and no other person, partnership, association or corporation shall acquire or have any right under or by virtue of this Agreement.
14.    “Market Stand-Off” Agreement.  Grantee agrees that, if requested by the Company or the managing underwriter of any proposed public offering of the Company’s securities (including any acquisition transaction where Company securities will be used as all or part of the purchase price), Grantee will not sell or otherwise transfer or dispose of any shares of Common Stock held by Grantee without the prior written consent of the Company or such underwriter, as the case may be, during such period of time, not to exceed 180 days following the effective date of the registration statement filed by the Company with respect to such offering, as the Company or the underwriter may specify.
15.    Severability.  Should any provision or portion of this Agreement be held to be unenforceable or invalid for any reason, the remaining provisions and portions of this Agreement shall be unaffected by such holding.
16.    Notices.  All notices, requests, demands and other communications required or permitted under this Agreement shall be in writing and shall be deemed to have been duly given and effective (i) when delivered by hand, (ii) when otherwise delivered against receipt therefor, or (iii) three (3) business days after being mailed if sent by registered or certified mail, postage prepaid, return receipt requested.  Any notice shall be addressed to the parties as follows or at such other address as a party may designate by notice given to the other party in the manner set forth herein:
(a)    if to the Company:
Deckers Outdoor Corporation
250 Coromar Drive
Goleta, California  93117
Attention:  Chief Financial Officer
(b)    if to the Grantee, at the address shown on the signature page of this Agreement or at his most recent address as shown in the employment or stock records of the Company.
17.    Applicable Law.  This Agreement shall be construed in accordance with the laws of the State of California without reference to choice of law principles, as to all matters, including, but not limited to, matters of validity, construction, effect or performance.
18.    Number and Gender.  Where the context requires, the singular shall include the plural, the plural shall include the singular, and any gender shall include all other genders.

19.    Section Headings.  The section headings of, and titles of paragraphs and subparagraphs contained in, this Agreement are for the purpose of convenience only, and they neither form a part of this Agreement nor are they to be used in the construction or interpretation thereof.
20.    Modifications.  This Agreement may not be amended, modified or changed (in whole or in part), except by a written agreement expressly referring to this Agreement, which agreement is executed by both of the parties hereto.  Notwithstanding the foregoing, amendments made pursuant to Section 8(b) hereof may be effectuated solely by the Company.
21.    Waiver.  Neither the failure nor any delay on the part of a party to exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude any other or further exercise of the same or of any right, remedy, power or privilege, nor shall any waiver of any right, remedy, power or privilege with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence.  No waiver shall be effective unless it is in writing and is signed by the party asserted to have granted such waiver.
22.    Counterparts.  This Agreement may be executed in one or more counterparts, all of which taken together shall constitute one agreement and any party hereto may execute this Agreement by signing any such counterpart.  This Agreement shall be binding upon Grantee and the Company at such time as the Agreement, in counterpart or otherwise, is executed by Grantee and the Company. 
[Signature Page Follows]

IN WITNESS WHEREOF, the parties hereto have executed this Restricted Stock Unit Award Agreement as of the date first above written.
	
		
	THE COMPANY:

DECKERS OUTDOOR CORPORATION

By:     

Name:     

Title:     
	GRANTEE:

   

	 
	Address:ex4_6.htm

Exhibit 4.6

TOFUTTI BRANDS INC.

 

2014 EQUITY INCENTIVE PLAN

 

INCENTIVE STOCK OPTION AGREEMENT

 

This Incentive Stock Option Agreement (“Option Agreement”), is dated as of _____ __, 20__ (the “Grant Date”), between Tofutti Brands Inc., a Delaware corporation (the “Company”) and ______ (the “Participant”). This Option Agreement is pursuant to the terms of the Tofutti Brands Inc. 2014 Equity Incentive Plan (the “Plan”), a copy of which has been furnished to the Participant and the terms of which are incorporated herein by reference. Unless otherwise indicated, whenever capitalized terms are used in this Option Agreement, they shall have the meanings set forth in the Plan.

 

Section 1. Grant of Options. The Participant is hereby granted an option representing ________ shares (“Shares”) of the Company’s common stock, $.01 par value (“Common Stock”) under the terms and conditions specified herein (the “Option”). Such Option is intended to constitute an Incentive Stock Option pursuant to Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”). If the Option granted hereunder fails to qualify as an Incentive Stock Option for any reason, then the Option, or portion thereof that does not so qualify, shall be treated as a Nonqualified Stock Option.

 

Section 2. Option Price. The exercise price of the Option shall be $_____ per share (the “Option Price”), which is at least equal to the Fair Market Value on the Grant Date (or 110% of the Fair Market Value if the Participant is a 10% Beneficial Owner (as defined in Section 4 below)).

 

Section 3. Vesting of Option.

 

3.1 Vesting Schedule. The Option shall vest and become exercisable based on the passage of time according to the following vesting schedule:

 

[Insert vesting schedule]

 

3.2 Accelerated Vesting. Notwithstanding Section 3.1 hereof, the Option shall become fully and immediately vested and exercisable upon: [(i)] the death or disability of the Participant[; and (ii) a Sale Event (as defined below) [provided that the Participant has been employed by the Company for a period of at least six (6) months as of the date of the Sale Event], except as determined in the sole discretion of the Committee and as set forth herein].

 

[For purposes of this Section 3.2, “Sale Event” means the consummation of (i) a voluntary dissolution or liquidation of the Company, (ii) the sale of all or substantially all of the assets of the Company to an unrelated person or entity, (iii) a merger, reorganization or consolidation in which the holders of the Company’s outstanding voting power immediately prior to such transaction do not own a majority of the outstanding voting power of the surviving or resulting entity immediately upon completion of such transaction, or (iv) any other transaction in which the owners of the Company’s outstanding voting power prior to such transaction do not own at least a majority of the outstanding voting power of the relevant entity after the transaction, in each case, regardless of the form thereof.]

 

Section 4. Option Term. The Option may be exercised, to the extent that it is vested pursuant to Section 3, during the Option Term, unless earlier terminated in accordance with the terms of the Plan. For purposes hereof, the “Option Term” shall commence on the Grant Date and shall expire on the earlier of (i) the tenth anniversary of the Grant Date unless the Participant is a 10% Beneficial Owner (as defined below) in which case the fifth anniversary of the Grant Date, and (ii) 90 days from the date that the Participant ceases to be employed by (or act as a consultant to) the Company or any of its subsidiaries. Upon the expiration of the Option Term, to the extent unexercised, the Option shall terminate and be of no further force or effect. For purposes of this Agreement, “10% Beneficial Owner” means a Participant who owns directly or indirectly more than 10% of the total combined voting power of all classes of stock issued to stockholders of the Company.

 

Section 5. Exercise of Option. An Option may be exercised by the Participant (or such other person as may be specified in the Plan) with respect to whole shares only, by completing the Exercise Notice attached hereto as Exhibit A and giving such completed Exercise Notice to the Company along with payment of the Option Price as described below.

 

  

  

  

The Option Price for the Shares acquired pursuant to the exercise of the Option shall be paid: [(i)] in cash or by check; [(ii) in whole shares of Common Stock already owned by the Participant; or (iii) a combination of (i) and (ii) above. The value of any share of Common Stock delivered in payment of the Option Price shall be its Fair Market Value of a share of Common Stock on the date the Option is exercised]. To the extent that the Common Stock is publicly traded, the Participant also may elect to make payment of the Option Price by arranging with a third party broker to sell a number of Shares otherwise deliverable to the Participant and attributable to the exercise of the Option in order to pay the aggregate exercise price of the Option and any applicable withholding and employment taxes due.

 

Section 6. Withholding of Taxes. The Company shall withhold from any amounts due and payable by the Company to the Participant (or secure payment from the Participant in lieu of withholding) the amount of any federal or state withholding or other taxes, if any, due from the Company with respect to the exercise of the Option, and the Company may defer such issuance until such withholding or payment is made unless otherwise indemnified to its satisfaction with respect thereto. The Company shall have the right to: (i) make deductions from any settlement of this Option, including the delivery of Shares, or require Shares or cash, or both, be withheld from any settlement of this Option, in each case in an amount sufficient to satisfy the withholding obligation but such amount shall not exceed the minimum required by Federal, state and local tax withholding due upon exercise; or (ii) take such other action as may be necessary or appropriate to satisfy the withholding obligation.

 

Section 7. Adjustments. If at any time while the Option is outstanding, the number of outstanding shares of Common Stock is changed by reason of a reorganization, recapitalization, stock split or any other event described in the Plan, the number and/or kind of Shares subject to the Option and/or the Option Price of such Shares shall be adjusted in accordance with the provisions of the Plan.

 

Section 8. Option Not Transferable. This Option may not be transferred, pledged, assigned, hypothecated or otherwise disposed of in any way by the Participant, except by will or laws of descent and distribution, and during the Participant’s life, may only be exercised by the Participant. Any attempt to effect a transfer of this Option that is not otherwise permitted by the Board of Directors, the Plan, or this Option Agreement shall be null and void.

 

Section 9. No Rights as Shareholder or Continued Employment.

 

9.1 No Right as Shareholder. The Participant shall not have any privileges of a shareholder of the Company with respect to any Shares subject to (but not acquired upon valid exercise of) the Option, nor shall the Company have any obligation to pay any dividends or otherwise afford any rights to which Shares are entitled with respect to such Shares, until the date of the issuance to the Participant of a stock certificate evidencing such Shares.

 

9.2 No Right to Continued Employment. Nothing in this Option Agreement shall confer upon a Participant who is an employee of the Company or any of its subsidiaries any right to continue in the employ of the Company or any of its subsidiaries or to interfere in any way with the right of the Company or any of its subsidiaries to terminate the Participant’s employment at any time.

 

Section 10. Incentive Stock Option Limitation. Pursuant to section 422(d) of the Code, to the extent the aggregate Fair Market Value of shares of Common Stock with respect to which Incentive Stock Options are exercisable for the first time by the Participant during any calendar year under all plans of the Bank and its subsidiaries exceeds $100,000, such Options shall be treated as Nonqualified Stock Options and (the Bank shall designate which Options will be treated as Nonqualified Stock Options).

 

Section 11. Disqualifying Disposition. If Shares acquired by exercise of the Option are disposed of within two years following the Grant Date or one year following the transfer of such Shares to the Participant upon exercise, the Participant shall, promptly following such disposition, notify the Bank in writing of the date and terms of such disposition and provide such other information regarding the disposition as the Board of Directors may reasonably require.

 

Section 12. Miscellaneous Provisions.

 

12.1 Notices. All notices, requests and demands to or upon a party hereto shall be in writing and shall be deemed to have been duly given when delivered by hand or three days after being deposited in the mail, postage prepaid or, in the case of facsimile notice, when received, addressed as follows or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.

 

  

  

  

If to the Company, to the following address:

 

Tofutti Brands Inc.

50 Jackson Drive

Cranford, New Jersey 07016

Attn: Chief Financial Officer

Telephone: (908) 272-2400

If to the Participant, to the address or facsimile number as shown on the signature page hereto.

 

12.2 Amendment. This Option Agreement may be amended only by a writing executed by the parties hereto that specifically states that it is amending this Option Agreement.

 

12.3 Governing Law. This Option Agreement shall be construed and interpreted in accordance with and governed by the laws of the State of Delaware, other than the conflict of laws’ provisions of such laws.

 

12.4 Titles. Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Option Agreement.

 

12.5 Construction. The construction of this Option Agreement is vested in the Company’s Board of Directors and the Board of Directors’ construction shall be final and conclusive on all persons.

 

[Signature Page Follows]

  

  

  

IN WITNESS WHEREOF, this Option Agreement has been executed and delivered by the parties hereto.

 

PARTICIPANT                                                                                                                                   TOFUTTI BRANDS INC.

	
Name:

	  	
Name:

	  	  	
Title:

	
Address:

	  	  
	
Telephone number:

	  	  
	
Facsimile:

	  	  

 

  

  

  

EXHIBIT A

 

TOFUTTI BRANDS INC.

 

2014 EQUITY INCENTIVE PLAN

 

EXERCISE NOTICE

 

Tofutti Brands Inc.

 

Attention: Stock Administration

 

1. Exercise of Option. Effective as of today, ___________, _____, the undersigned (“Participant”) hereby elects to exercise Participant’s option to purchase _________ shares of the Common Stock (the “Option Shares”) of Tofutti Brands Inc. (the “Company”) under and pursuant to the Company’s 2014 Equity Incentive Plan (the “Plan”) and the Incentive Stock Option Agreement dated _____________________ (the “Option Agreement”). Capitalized terms used herein without definition shall have the meanings given in the Option Agreement.

 

	
Date of Grant:

	  	
______________________________

	
Number of Option Shares as to which Option is Exercised:

	  	  
	
Exercise Price per Share:

	  	
$____________

	
Total Exercise Price:

	  	
$____________

	
Certificate to be Issued in Name of:

	  	  
	
Cash Payment Delivered Herewith:

	
 ̈

	
$____________

2. Representations of Participant. Participant acknowledges that Participant has received, read, and understood the Plan and the Option Agreement. Participant agrees to abide by and be bound by their terms and conditions.

 

3. Rights as Shareholder. Until the stock certificate evidencing such Option Shares is issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a stockholder shall exist with respect to Option Shares subject to the Option, notwithstanding the exercise of the Option. The Company shall issue (or cause to be issued) such stock certificate promptly after the Option is exercised. No adjustment will be made for a dividend or other right for which the record date is prior to the date the stock certificate is issued. Participant shall enjoy rights as a shareholder until such time as Participant disposes of the Option Shares or the Company. Upon such exercise, Participant shall have no further rights as a holder of the Option Shares.

 

4. Tax Consultation. Participant understands that Participant may suffer adverse tax consequences as a result of Participant’s purchase of the Option Shares. Participant represents that Participant has consulted with any tax consultants Participant deems advisable in connection with the purchase of the Option Shares and that Participant is not relying on the Company for any tax advice.

 

5. Restrictive Legends and Stop-Transfer Orders.

 

5.1 Legends. Unless the Option Shares have been registered pursuant to an effective registration statement filed with the Securities and Exchange Commission, Participant understands and agrees that the Company shall cause the legends set forth below or legends substantially equivalent thereto, to be placed upon any certificate(s) evidencing ownership of the Option Shares together with any other legends that may be required by state or federal securities laws:

 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “ACT”) AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED, OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR, IN THE OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE, TRANSFER, PLEDGE, OR HYPOTHECATION IS IN COMPLIANCE THEREWITH.

 

5.2 Stop Transfer Notices. Participant agrees that, in order to ensure compliance with the restrictions referred to herein, the Company may issue appropriate “stop transfer” instructions to its transfer agent, if any, and that, if the Company transfers its own securities, it may make appropriate notations to the same effect in its own records.

 

  

  

  

 

5.3 Refusal to Transfer. The Company shall not be required (i) to transfer on its books any Option Shares that have been sold or otherwise transferred in violation of any of the provisions of this Agreement or (ii) to treat as owner of such Option Shares or to accord the right to vote or pay dividends to any purchaser or other transferee to whom such Option Shares shall have been so transferred.

 

6. Successors and Assigns. The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement shall inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer herein set forth, this Agreement shall be binding upon Participant and his or her heirs, executors, representatives, administrators, successors, and assigns.

 

7. Interpretation. Any dispute regarding the interpretation of this Exercise Notice shall be submitted by Participant or by the Company forthwith to the Company’s Board of Directors or committee thereof that is responsible for the administration of the Plan (the “Committee”), which shall review such dispute at its next regular meeting. The resolution of such a dispute by the Committee shall be final and binding on the Company and on Participant.

 

8. Governing Law; Severability. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware excluding that body of law pertaining to conflicts of law. Should any provision of this Agreement be determined by a court of law to be illegal or unenforceable, the other provisions shall nevertheless remain effective and shall remain enforceable.

 

9. Notices. Any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given upon personal delivery or upon deposit in the United States mail by certified mail, with postage and fees prepaid, addressed to the other party at its address as shown below beneath its signature, or to such other address as such party may designate in writing from time to time to the other party.

 

10. Further Instruments. The parties agree to execute such further instruments and to take such further action as may be reasonably necessary to carry out the purposes and intent of this Agreement.

 

11. Delivery of Payment. Participant herewith delivers to the Company the full Exercise Price for the Option Shares as set forth above in Section 1, as well as any applicable withholding tax.

 

12. Entire Agreement. The Plan and Option Agreement are incorporated herein by reference. This Agreement, the Plan, and the Option Agreement constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and Participant with respect to the subject matter hereof.

 

	
Accepted by:

	
Submitted by:

	  	  
	
TOFUTTI BRANDS INC.

	
PARTICIPANT

	  	  
	  	  
	
By:

	  
	
Name:

	
Name:

	
Its:

	
Address:

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