Document:

exv10w6wiii

Exhibit 10.6(iii)

NONQUALIFIED STOCK OPTION AGREEMENT

FINGERHUT DIRECT MARKETING, INC.

2008 EQUITY AND INCENTIVE PLAN

(NONEXECUTIVE EMPLOYEES)

          THIS AGREEMENT, made effective as of this 8th day of August, 2008 (the “Date of Grant”), by
and between Fingerhut Direct Marketing, Inc., a Delaware corporation (the “Company”), and [Insert
Participant Name] (“Participant”).

W I T N E S S E T H:

          WHEREAS, Participant on the date hereof is an employee or officer of the Company or one of its
Affiliates; and

          WHEREAS, the Company wishes to grant a nonqualified stock option to Participant to purchase
shares of the Company’s Common Stock pursuant to the Company’s 2008 Equity and Incentive Plan (the
“Plan”); and

          WHEREAS, the Committee has authorized the grant of a nonqualified stock option to Participant
and has determined that, as of the effective date of this Agreement, the fair market value of the
Company’s Common Stock is $0.009 per share;

          NOW, THEREFORE, in consideration of the premises and of the mutual covenants herein contained,
the parties hereto agree as follows:

1. Grant of Option. The Company hereby grants to Participant on the Date of Grant, the
right and option (the “Option”) to purchase all or portions of an aggregate of [Insert Number of
Shares] (•) shares of Common Stock at a per share price of $0.009 on the terms and conditions set
forth herein, and subject to adjustment pursuant to Section 11 of the Plan. This Option is
not intended to be an incentive stock option within the meaning of Section 422 of the Code,
or any successor provision, and the regulations thereunder. Capitalized terms not defined herein
shall have the meanings set forth in the Plan.

2. Duration and Exercisability.

	 	a.	 	General. The term during which this Option may be exercised shall
terminate on a date which is ten (10) years from the Date of Grant (the “Expiration
Date”), except as otherwise provided in Paragraphs 2(b) through 2(e) below. This Option
shall become exercisable according to the following schedule:

	 	 	 
	Vesting Date	 	Number of Shares
	 
	May 21, 2009

	 	F•]
	May 21, 2010

	 	F•]
	May 21, 2011

	 	F•]
	May 21, 2012

	 	F•]

 

 

	 	 	 	Once the Option becomes exercisable to the extent of any of the aggregate
number of shares specified in Paragraph 1, Participant may continue to exercise this
Option with respect to such shares under the terms and conditions of this Agreement
until the termination of the Option as provided herein. If Participant does not
purchase upon an exercise of this Option the full number of shares which Participant
is then entitled to purchase, Participant may purchase upon any subsequent exercise
prior to this Option’s termination such previously unpurchased shares in addition to
those Participant is otherwise entitled to purchase.
	 
	 	 	 	Notwithstanding anything herein to the contrary, in the event a Public Offering
becomes effective prior to July 31, 2010, the tranche of the Option scheduled to
vest on May 21, 2012 shall become fully exercisable on the date such Public Offering
becomes effective.
	 
	 	b.	 	Termination of Employment (other than Termination for Cause, Disability or
Death). If Participant’s Employment with the Company and its Affiliates is
terminated for any reason other than termination by the Company for Cause, Disability,
or death, this Option shall terminate on the earlier of (i) ninety (90) days following
the date of such termination of Employment, and (ii) the Expiration Date of this Option
stated in Paragraph 2(a) above. In such period following the termination of
Participant’s Employment, this Option shall be exercisable only to the extent the
Option was exercisable on the vesting date immediately preceding such termination of
Employment, but had not previously been exercised. To the extent this Option was not
exercisable upon such termination of Employment, or if Participant does not exercise
the Option within the time specified in this Paragraph 2(b), all rights of Participant
under this Option shall be forfeited.
	 
	 	c.	 	Termination of Employment for Cause. If Participant’s Employment with
the Company and its Affiliates is terminated for Cause, the unexercised portion of this
Option shall immediately expire, and all rights of Participant under this Option shall
be forfeited.
	 
	 	d.	 	Termination of Employment — Disability. If Participant’s Employment
with the Company and its Affiliates terminates because of Disability, this Option shall
terminate on the earlier of (i) one (1) year following the date of such termination of
Employment, and (ii) the Expiration Date of this Option stated in Paragraph 2(a) above.
In such period following the termination of Participant’s Employment, this Option shall
be fully exercisable, whether or not any portion of the Option was not exercisable
immediately prior to such termination of Employment (but only to the extent it had not
previously been exercised). If Participant does not exercise the Option within the time
specified in this Paragraph 2(d), all rights of Participant under this Option shall be
forfeited.
	 
	 	e.	 	Termination of Employment — Death. In the event of Participant’s death,
this Option shall terminate on the earlier of (i) one (1) year following the date of
the

 

 

	 	 	 	Participant’s death, and (ii) the Expiration Date of this Option stated in Paragraph
2(a) above. In such period following Participant’s death, this Option shall be fully
exercisable by the person or persons to whom Participant’s rights under this Option
shall have passed by Participant’s will or by the laws of descent and distribution
(but only to the extent it had not previously been exercised). If such person or
persons do not exercise this Option within the time specified in this Paragraph
2(e), all rights under this Option shall be forfeited.

3. Manner of Exercise.

	 	a.	 	General. The Option may be exercised only by Participant (or other
proper party in the event of death or incapacity), subject to the conditions of the
Plan and subject to such other administrative rules as the Committee may deem
advisable, by delivering within the option period written notice of exercise to the
Company at its principal office. The notice shall state the number of shares as to
which the Option is being exercised and shall be accompanied by payment in full of the
option price for all shares designated in the notice. The exercise of the Option shall
be deemed effective upon receipt of such notice by the Company and upon payment that
complies with the terms of the Plan and this Agreement. The Option may be exercised
with respect to any number or all of the shares as to which it can then be exercised
and, if partially exercised, may be so exercised as to the unexercised shares any
number of times during the option period as provided herein.
	 
	 	b.	 	Form of Payment. The Participant’s payment of the option price in full
at the time of exercise shall be (i) in cash or cash equivalents, (ii) with the consent
of the Committee, in Shares, valued at the Fair Market Value on the date of exercise,
or (if permitted by the Committee and subject to such terms and conditions as it may
determine) by surrender of outstanding Awards under the Plan, or (iii) in accordance
with such procedures or in such other form as the Committee shall from time to time
determine (including by permitting broker’s cashless exercise procedure).
	 
	 	c.	 	Stock Transfer Records. As soon as practicable after the effective
exercise of all or any part of the Option, Participant shall be recorded on the stock
transfer books of the Company as the owner of the shares purchased, and the Company
shall deliver to Participant one or more duly issued stock certificates evidencing such
ownership. All requisite original issue or transfer documentary stamp taxes shall be
paid by the Company.

4. Transfer Restrictions and Mechanics.

	 	a.	 	Definitions. Solely for purposes of this Paragraph 4 and Paragraph
5(k), the following terms have the respective meanings set forth below:

	 	(i)	 	“Affiliate” shall have the meaning ascribed to such term in
Rule 12b-2 of the General Rules and Regulations under the Exchange Act, and
shall

 

 

	 	 	 	include, with respect to any Investor, any managed account, investment fund
or other vehicle for which such Investor or any Affiliate or such Investor
acts as an investment advisor or portfolio manager; provided, that with
respect to Bain Capital, the term Affiliate shall be deemed to include any
Person under common management with Bain Capital.
	 
	 	(ii)	 	“As-Converted Basis” shall mean, for purposes of determining
the number of shares of Common Stock outstanding, a basis of calculation which
takes into account (a) the number of shares of Common Stock actually issued and
outstanding at the time of such determination, and (b) the number of shares of
Common Stock that is then issuable upon the exercise or conversion of all
outstanding securities or rights convertible into or exercisable for Common
Stock, including without limitation, the Series A Preferred Stock, Series B
Preferred Stock and the Warrants and the number of shares of Common Stock that
would be issuable upon the conversion of the Series A Preferred Stock then
issuable upon exercise of the Warrants, but excluding stock options and any
other warrants for the purchase of any shares of Common Stock,
Series A Preferred Stock or Series B Preferred Stock.
	 
	 	(iii)	 	“Bain Capital” means Bain Capital Venture Fund 2007, L.P.
	 
	 	(iv)	 	“Common Stock” shall mean the Company’s common stock, par value
$0.00001 per share.
	 
	 	(v)	 	“Investors” shall mean the Investors that are or hereafter
become a party to Investors Stockholders Agreement.
	 
	 	(vi)	 	“Investors Stockholders Agreement” shall mean the Stockholders
Agreement dated as of May 15, 2008, among the Company and the Investors named
therein, as such agreement is amended, modified or replaced from time to time.
	 
	 	(vii)	 	“Option Shares” shall mean shares of Common Stock issued or
issuable to the Participant pursuant to this Agreement.
	 
	 	(viii)	 	“Permitted Transferee” means any of the following Persons to whom or to which
a Participant Transfers any Option Shares: (a) a family member of the
Participant or a trust established for the benefit thereof; and (b) a
transferee of the Participant by will or the laws of intestate succession.
	 
	 	(ix)	 	“Person” shall be construed broadly and shall include without
limitation an individual, a partnership, a corporation, an association, a joint
stock corporation, a limited liability corporation, a trust, a joint venture,
an unincorporated organization and a governmental authority.
	 
	 	(x)	 	“Qualified Public Offering” means an underwritten public
offering of shares of Common Stock in which the aggregate net proceeds to the

 

 

	 	 	 	Company equal or exceed $75 million and the public offering price per share
is not less than $0.2235 (as adjusted appropriately in the event of any
subdivision, combination, reorganization, recapitalization,
reclassification, stock dividend or similar event affecting the Common
Stock) and after which the Common Stock is listed on the New York Stock
Exchange or the Nasdaq National Market.
	 
	 	(xi)	 	“Sale of the Company” means (i) a sale of all or substantially
all of the assets of the Company, (ii) an acquisition of the Company by one or
more persons or entities by means of any transaction or series of related
transactions (including any reorganization, merger, consolidation) where the
voting securities of the Company outstanding immediately preceding such
transaction or the voting securities issued with respect to the voting
securities of the Company outstanding immediately preceding such transaction
represent less than 50% of the voting securities of the Company or surviving
entity, as the case may be, following such transaction, or (iii) a transaction
or series of related transactions resulting in the transfer of shares
representing more than 50% of the voting securities of the Company. A sale (or
multiple related sales) of one or more subsidiaries of the Company (whether by
way of merger, consolidation, reorganization or sale of all or substantially
all assets or securities) which constitutes all or substantially all of the
consolidated assets of the Company shall be deemed a sale of substantially all
the assets of the Company for purposes of the foregoing definition.
	 
	 	(xii)	 	“Series A Preferred Stock” means the Series A Convertible
Preferred Stock, par value $0.00001 per share, of the Company.
	 
	 	(xiii)	 	“Series B Preferred Stock means the Series B Convertible Preferred Stock, par
value $0.00001 per share, of the Company.
	 
	 	(xiv)	 	“Shares” shall mean shares of Common Stock and Series A
Preferred Stock, and warrants for the purchase of any shares of Common Stock
and Series A Preferred Stock.
	 
	 	(xv)	 	“Transfer” shall mean any sale, assignment, encumbrance,
hypothecation, pledge, conveyance in trust, gift, transfer by bequest, devise
or descent, or other transfer or disposition of any kind, including, but not
limited to, transfers to receivers, levying creditors, trustees or receivers in
bankruptcy proceedings or general assignees for the benefit of creditors,
whether voluntary or by operation of law, directly or indirectly, of any
Shares.

	 	b.	 	Notice of Transfer. The Participant may not Transfer any Option Shares other
than as set forth in Paragraph 4(e) hereof unless (i) the Participant shall have
received a bona-fide arm’s length offer (an “Offer”) to purchase such Option Shares
from a third party who has agreed in writing be bound by the terms of this

 

 

	 	 	 	Agreement
and who the Participant reasonably believes has the financial capacity to fund such
purchase, (ii) such Participant gives written notice (the “Notice”) to the Company
at least thirty (30) days prior to the closing of such proposed Transfer as
described below, and (iii) such Participant otherwise complies with this Paragraph
4. Promptly after receipt of such Notice, the Company shall provide a copy thereof
to the Investors. The Notice shall describe in reasonable detail the proposed
Transfer including, without limitation, the number of Option Shares to be
transferred (the “Offered Shares”), the nature of such Transfer, the consideration
to be paid, and the name and address of each prospective purchaser or transferee.

	 	c.	 	Right of First Refusal and Co-Sale Rights. For a period of ten (10)
days following receipt of any Notice, the Company shall have the right (the “Company
Refusal Right”) upon written notice to the Participant to elect to purchase all or any
part of the Offered Shares on the same terms and conditions set forth in the Notice,
and for a period of twenty (20) days following the receipt of the Notice, each Investor
shall have, upon written notice to the Participant, either (a) the right (the “Right of
First Refusal”), subject to the Company Refusal Right, to elect to purchase all or any
part of the Offered Shares on the same terms and conditions as set forth in the Notice
or (b) the right (the “Co-Sale Right”) to elect to sell on such terms all or any part
of that number of Shares then owned by such Investor (the “Co-Sale Shares”) equal to
the product obtained by multiplying (i) the aggregate number of Offered Shares by (ii)
a fraction the numerator of which is the number of shares of Common Stock owned by all
of the Investors (on an As-Converted Basis) and the denominator of which is the total
number of shares of Common Stock owned by the Participant and all of the Investors (on
an As-Converted Basis).

	 	(i)	 	If the Company does not elect to purchase all of the Offered
Shares within the ten (10) day period specified above, the Company shall give
prompt written notice to the Investors setting forth the number of Offered
Shares not purchased by the Company (the “Remaining Shares”). The Remaining
Shares shall be allocated among the Investors who have exercised the Right of
First Refusal (the “Participating Investors”) as follows: there shall first be
allocated to each Participating Investor a number of Remaining Shares equal to
the lesser of (i) the number of Remaining Shares which the Participating
Investor has elected to purchase and (ii) such Participating Investor’s Refusal
Right Pro Rata Share (as defined below) of the Remaining Shares. The balance of
the Remaining Shares which the Participating Investors have elected to purchase
shall be allocated to the Participating Investors who have elected to purchase
more than their Refusal Right Pro Rata Share of the Remaining Shares pro rata
based on the number of Remaining Shares which each Participating Investor has
elected to purchase in excess of such Participating Investor’s Refusal Right
Pro Rata Share of the Remaining Shares. Each Participating Investor’s “Refusal
Right Pro Rata Share” shall be equal to the fraction (i) the numerator of which
is the number of shares of Common

 

	 	 	 	Stock owned by such Participating Investor
(on an As-Converted Basis)
and (ii) the denominator of which is the total number of shares of Common
Stock owned by all of the Participating Investors (on an As-Converted
Basis).

	 	(ii)	 	Each Investor who has exercised the Co-Sale Right (a
“Co-Sale Participant”) shall be entitled to sell a number of Co-Sale Shares
equal to the lesser of (a) the number of Offered Shares which the Co-Sale
Participant has elected to sell and (b) such Co-Sale Participant’s Co-Sale Pro
Rata Share of the Offered Shares which are not purchased by the Company
pursuant to the Company Refusal Right or by the Participating Investors
pursuant to the Right of First Refusal (the “Co-Sale Remaining Shares”). Each
Participant’s “Co-Sale Pro Rata Share” shall be equal to the fraction (i) the
numerator of which is the number of shares of Common Stock owned by such
Co-Sale Participant (on an As-Converted Basis) and (ii) the denominator of
which is the total number of shares of Common Stock owned by the Participant
and all of the Investors (on As-Converted Basis).

	 	(iii)	 	Any proposed Transfer at a different price or on terms and
conditions more favorable to the transferee(s) than specified in the Notice, or
not completed within the time specified in this Paragraph 4(b), as well as any
subsequent proposed Transfer of any Shares by a Stockholder, shall again be
subject to the Company Refusal Right and the Right of First Refusal and Co-Sale
Rights of the Investors, and shall require compliance by the Participant with
the procedures described in this Paragraph 4.

	 	(iv)	 	The exercise or non-exercise of the Right of First Refusal
or the Co-Sale Rights by the Investors in respect of one or more Transfers of
Shares made by any Participant shall not adversely affect their rights to
participate in subsequent Transfers of Shares subject to this Paragraph 4.

	 	d.	 	Transfer Mechanics.

	 	(i)	 	If (i) the Company and/or the Participating Investors elect
to purchase all of the Offered Shares subject to the Notice or (ii) the Company
and/or the Participating Investors elect to purchase less than all the Offered
Shares and the prospective purchaser identified in the Notice does not agree to
purchase any of the Offered Shares not so purchased, the following provisions
shall apply: The Company and/or Participating Investors shall effect the
purchase of the Offered Shares and/or Remaining Shares on a date specified by
the Participant by notice to the Company and/or the Participating Investors not
earlier than the later of (x) ten (10) days after such notice or (y) thirty
(30) days after the receipt of the Notice by the Investors. On the date of such
purchase, the Participant shall deliver to the Company and/or the Participating
Investors, as applicable, the certificates representing the Shares to be
purchased by the

 

 

	 	 	 	Company and/or the Participating Investors, each certificate to be properly
endorsed for transfer, in exchange for payment by the Company and/or the
Participating Investors, as applicable, of the purchase price for the
Shares.

	 	(ii)	 	If (i) the Company and the Participating Investors do not
elect to purchase any of the Offered Shares or (ii) the Company and/or the
Participating Investors elect to purchase less than all of the Offered Shares
and the prospective purchaser agrees to purchase less than all of the Offered
Shares, the following provisions shall apply: The Participant may, not later
than forty (40) days following delivery to the Company of the Notice, enter
into an agreement providing for the closing of the Transfer to the third party
purchaser(s) identified in the Notice of any Offered Shares with respect to
which neither the Company Refusal Right nor the Right of First Refusal has been
exercised, together with the closing of the purchase of any Shares to be sold
by any Co-Sale Participant, such purchase to occur within thirty (30) days of
such agreement at a price and on terms and conditions no more favorable to the
transferee(s) thereof than specified in the Notice. Simultaneously with such
purchase there shall occur the purchase of any Offered Shares with respect to
which the Company Refusal Right or the Right of First Refusal has been
exercised. On the date of such purchase, each Co-Sale Participant shall be paid
that portion of the sale proceeds to which such Co-Sale Participant is entitled
by reason of its participation in such sale and the Company and/or each
Participating Investor, as applicable, shall pay the Participant the purchase
price to be paid by such Person for the Offered Shares purchased by them. Upon
receipt of such payment, each Co-Sale Participant shall promptly deliver to the
Participant for Transfer to the prospective purchaser(s) and, if applicable,
the Participant shall deliver to the Company and/or the Participating
Investors, one or more certificates properly endorsed for transfer which
represent the Shares to be sold by each such Person pursuant to this Paragraph
4. To the extent that any prospective purchaser or purchasers prohibits such
assignment or otherwise refuses to purchase Shares from a Co-Sale Participant
exercising its Co-Sale Rights hereunder, such Participant shall not sell to
such prospective purchaser or purchasers any Shares unless and until,
simultaneously with such sale, such Participant shall purchase such Shares from
such Co-Sale Participant on the same terms and conditions specified in the
Notice.

	 	(iii)	 	If the consideration to be paid for the Shares by the third
party purchaser shall be other than cash, the Company or the Participating
Investors, as applicable, exercising the Company Refusal Right or the Right of
First Refusal may in lieu of such consideration pay cash equal to the fair
market value of such consideration as mutually agreed between the Participant
and the holders of a majority of the Shares as to which the Right of First
Refusal and Company Refusal Right have been exercised. If

 

 

	 	 	 	such mutual agreement cannot be reached, the Appraisal Procedure set forth in the Company’s Amended
and Restated Certificate of
Incorporation shall be followed mutatis mutandis and the time
periods in Paragraph 4(b) shall be extended by the time needed to determine
such fair value.

	 	e.	 	Exempt Transfers.

	 	(i)	 	The Participant may Transfer Option Shares without complying
with the provisions of Paragraph 4 if such Transfer is to any Permitted
Transferee; provided that in the event of any Transfer made pursuant to
this Paragraph 4(e), (A) the Participant shall inform the Company of such
Transfer prior to effecting it, and (B) the transferee shall furnish the
Company with a written agreement, reasonably satisfactory to the Company, to be
bound by and comply with all provisions of this Paragraph 4 as if such
transferee were the Participant. Such Transferred Option Shares shall remain
Option Shares hereunder.

	 	f.	 	Notwithstanding the foregoing, the provisions of Paragraph 4 hereof shall
not apply to the sale of any Shares to the public pursuant to a registration statement
filed with, and declared effective by, the Securities and Exchange Commission under
Securities Act of 1933, as amended (the “Securities Act”).

	 	g.	 	Transfers to Competitors. Any other provision of this Agreement to
the contrary notwithstanding, other than in connection with a Sale of the Company,
prior to a Qualified Public Offering, no Transfer of Option Shares may be made by the
Participant to a competitor of the Company or any person or entity that invests in any
such competitor, as determined in good faith by the Board.

	 	h.	 	Stockholder Lockup Agreements in Connection with Initial Public
Offering. Notwithstanding anything in the Plan to the contrary, the Participant
agrees that, subject to any early release provisions that apply generally to
stockholders of the Company, the Participant will not, if reasonably requested by the
managing underwriter, for a period of up to 180 days following the effective date of
the registration statement for an initial public offering directly or indirectly sell,
offer to sell, grant any option for the sale of, or otherwise dispose of any Common
Stock or securities convertible into Common Stock, except for (i) transactions relating
to Common Stock or other securities acquired in open market transactions after the
completion of the initial public offering, and (ii) Transfers to Permitted Transferees
(each of whom shall have furnished to the Company and the managing underwriter their
written consent to be bound by this Paragraph 4 or a similar agreement satisfactory to
the Company).

	 	i.	 	Consequences of Prohibited Transfer. Any attempt by a Participant to
Transfer Option Shares in violation of the terms of this Paragraph 4 shall be void, and
the Company will not effect such a Transfer nor will it treat any alleged transferee as
the holder of such Option Shares.

 

 

	 	j.	 	Legend. Each certificate representing the Option Shares subject to
the terms of this Agreement shall be endorsed with the following legend or legend(s)
containing substantially similar information (in addition to any legend required under
applicable securities laws or otherwise):

	 	 	 	THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THEY MAY
NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A
REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A OF SUCH ACT. THE SALE OR
TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE TERMS
AND CONDITIONS OF AN OPTION AGREEMENT TO WHICH THE HOLDER HEREOF AND THE COMPANY ARE
PARTIES. COPIES OF SUCH AGREEMENT MAY BE OBTAINED UPON WRITTEN REQUEST TO THE
SECRETARY OF THE COMPANY.

	 	 	 	This legend shall be removed upon termination of this Paragraph 4. The Participant
consents to the Company making a notation on its records and giving instructions to
any transfer agent of the Company’s securities and capital stock in order to
implement the restrictions on transfer established in this Paragraph 4.

	 	j.	 	The Participants agree that the Company may instruct its transfer agent to
impose transfer restrictions on Option Shares represented by certificates bearing the
legend referred to in Paragraph 4(i) above to enforce the provisions of this Paragraph
4. The legend shall be removed upon termination of this Paragraph 4.

	 	k.	 	Drag Along Rights.

	 	(i)	 	In the event that the holders of at least 66% of the then
outstanding shares of Series B Preferred Stock (the “Proposing Stockholders”)
agree to and accept an offer from a third party or third parties not Affiliated
with any Proposing Stockholder (a “Buyer”) to consummate a transaction or
series of related transactions with such Buyer pursuant to which Buyer would
acquire all of the Shares held by such Proposing Shareholders for a specified
price payable in cash, securities or other consideration and on specified terms
and conditions, the Participant shall be required, if so demanded by the
Proposing Shareholders (a “Drag Along Notice”) to sell all of the Participant’s
Option Shares to such Buyer in such transaction(s) and to participate in such
transaction(s) (a “Drag Along Sale”).

	 	(ii)	 	The provisions of this Paragraph 4(k) shall apply regardless
of the form of consideration received in the Drag Along Sale, and the
Participant shall (i) if the Drag Along Sale is structured as a merger or
consolidation, waive any dissenters’ rights, appraisal rights or similar rights
in connection with

 

 

	 	 	 	such merger or consolidation, or (ii) if the Drag Along Sale is structured
as a sale, agree to sell all of the Participant’s Option Shares on the terms
and conditions approved by the Proposing Stockholders. The Participant (a)
shall be subject to the same terms and conditions, and (b) shall execute
such documents and take such actions as may be reasonably required by the
Company and the Proposing Shareholders.

	 	(iii)	 	Upon the consummation of the Drag Along Sale, the
Participant (i) shall receive the same form of consideration and the same
amount of consideration per share of Common Stock (on an As Converted Basis) as
every other holder of any class or series of Shares, except to the extent
otherwise approved in connection with Section 2 of the Amended and Restated
Certificate of Incorporation of the Company, as amended from time to time, and
(ii) shall be given the same option, if any, as any other holders of any other
class or series of Shares as to the form of consideration to be received.

	 	(iv)	 	Transfer Mechanics; Further Assurances.

	 	(a)	 	At least five (5) days prior to the
consummation of a Drag Along Sale (which date and the place and time of
such consummation shall be designated by the Proposing Stockholders and
provided to the Participant in the Drag Along Notice), the Participant
shall deliver for transfer to the Buyer one or more certificates,
properly endorsed for transfer in form satisfactory to the Proposing
Stockholders, which represent all of the Option Shares held by the
Participant, duly executed and free and clear of any liens. The
certificate(s) delivered by the Participant shall be transferred to the
Buyer identified in the Drag Along Notice as part of the consummation
of the Drag Along Sale. Upon receipt of the proceeds of the Drag Along
Sale, the Proposing Stockholders shall promptly remit to the
Participant that portion of such proceeds to which the Participant is
entitled by reason of the Participant’s participation in such sale.

	 	(b)	 	In connection with a Drag Along Sale, the
Participant agrees to execute and deliver such agreements as may be
reasonably specified by the Proposing Stockholders to which such
Proposing Stockholders will also be party, on the same terms,
including, without limitation, agreements to (a) (i) made individual
representation, warranties, covenants and other agreements as to the
unencumbered title to the Participant’s Option Shares and the power,
authority and legal right to Transfer such Option Shares and to enter
into the agreements relating thereto and the absence of any adverse
claim with respect to such Option Shares (but shall not be required to
make individual representations or warranties with respect to any of
the Company’s operations, activities, financial

 

 

	 	 	 	condition or other characteristics) and (ii) be liable without
limitation as to such individual representations, warranties,
covenants and other agreements and (b) be liable (whether by purchase
price adjustment, indemnity payments or otherwise) in respect of
representations, warranties, covenants and agreements in respect of
the Company; provided, however, that the aggregate amount of
liability described in this clause (b) in connection with any sale of
Shares shall not exceed the less of (i) the Participant’s pro rata
portion of any such liability, to be determined in accordance with
the Participant’s portion of the total number of Shares included in
such Drag Along Sale (on an As Converted Basis) or (ii) the proceeds
to such Participant in connection with such Drag Along Sale.

	 	l.	 	Term. This Paragraph 4 shall continue in full force and effect from
the date hereof through the earliest of the following dates, on which date it shall
terminate in its entirety:

	 	(i)	 	the date of the closing of a Qualified Public Offering; and

	 	(ii)	 	the date of the consummation of a Sale of the Company.

	 	 	 	For avoidance of doubt, this Paragraph 4 shall survive termination
or expiration of this Agreement.

5. Miscellaneous.

	 	a.	 	Employment-at-Will; Rights as Shareholder. This Agreement shall not
confer on Participant any right with respect to continuance of Employment by the
Company or any of its Affiliates, nor will it interfere in any way with the right of
the Company to terminate such Employment. Participant’s Employment relationship with
the Company and its Affiliates shall be employment-at-will, and nothing in this
Agreement shall be construed as creating an employment contract for any specified term
between Participant and the Company or any Affiliate. Participant shall have no rights
as a shareholder with respect to shares subject to this Option until such shares have
been issued to Participant upon exercise of this Option. No adjustment shall be made
for dividends (ordinary or extraordinary, whether in cash, securities or other
property), distributions or other rights for which the record date is prior to the date
such shares are issued, except as provided in Section 11 of the Plan.

	 	a.	 	Nonsolicitation. The Participant agrees that during the period of
his Employment with the Company or any of its Affiliates and for the one (1) year
period immediately following termination of such Employment for any reason, the
Participant shall not (i) directly or indirectly, engage in the recruiting, soliciting
or inducing of any nonclerical employee or employees of the Company or Affiliates to
terminate their employment with, or otherwise cease their

 

 

	 	 	 	relationship with the Company or any of its Affiliates, or in hiring or assisting another person or
entity to hire any nonclerical employee of the Company or any of its Affiliates or
any person who within six (6) months before had been a nonclerical employee of the
Company or any of their Affiliates and were recruited or solicited for such
employment or other retention while an employee of the Company (other than any of
the foregoing activities engaged in with the prior written approval of the Company);
or (ii) directly or indirectly solicit, induce or encourage or attempt to persuade
any agent, supplier or customer of the Company or any Affiliate to terminate such
agency or business relationship. The Participant acknowledges that if (x) the
Participant breaches any term or condition contained in this Paragraph 5(b) and (y)
the Company provides the Participant with written notice of such breach, then (A)
all of the Option that has not vested prior to the date of such notice shall be
automatically forfeited and (B) the Company shall have the right to repurchase all
of the Option Shares then held by the Participant at the per share cost paid by the
Participant for such Option Shares.

	 	b.	 	Securities Law Compliance. The exercise of all or any parts of this
Option shall only be effective at such time as counsel to the Company shall have
determined that the issuance and delivery of Common Stock pursuant to such exercise
will not violate any state or federal securities or other laws. Participant may be
required by the Company, as a condition of the effectiveness of any exercise of this
Option, to agree in writing that all Common Stock to be acquired pursuant to such
exercise shall be held, until such time that such Common Stock is registered and freely
tradable under applicable state and federal securities laws, for Participant’s own
account without a view to any further distribution thereof, that the certificates for
such shares shall bear an appropriate legend to that effect and that such shares will
be not transferred or disposed of except in compliance with applicable state and
federal securities laws.

	 	c.	 	Shares Reserved. The Company shall at all times during the option
period reserve and keep available such number of shares as will be sufficient to
satisfy the requirements of this Agreement.

	 	d.	 	Withholding Taxes. In order to permit the Company to comply with all
applicable federal or state income tax laws or regulations, the Company may take such
action as it deems appropriate to insure that, if necessary, all applicable federal and
state payroll, income or other taxes are withheld from any amounts payable by the
Company to Participant. If the Company is unable to withhold such federal and state
taxes, for whatever reason, Participant hereby agrees to pay to the Company an amount
equal to the amount the Company would otherwise be required to withhold under federal
or state law. Subject to such rules as the Committee may adopt, the Committee may, in
its sole discretion, permit Participant to satisfy such withholding tax obligations, in
whole or in part (i) by delivering shares of Common Stock, or (ii) by electing to have
the Company withhold shares of Common Stock otherwise issuable to Participant, in
either case having a Fair Market Value equal to the minimum required tax withholding,
based on the minimum statutory

 

 

	 	 	 	withholding rates for federal and state tax purposes,
including payroll taxes, that are applicable to the supplemental income resulting from the exercise of the
nonqualified stock option. In no event may the Company withhold shares having a Fair
Market Value in excess of such statutory minimum required tax withholding.
Participant’s election to have shares withheld for this purpose shall be made on or
before the date the option is exercised or, if later, the date that the amount of
tax to be withheld is determined under applicable tax law. Such election shall be
approved by the Committee and otherwise comply with such rules as the Committee may
adopt to assure compliance with Rule 16b-3, or any successor provision, as then in
effect, of the General Rules and Regulations under the Securities Exchange Act of
1934, if applicable.

	 	f.	 	Nontransferability. During the lifetime of Participant, the Option
shall be exercisable only by Participant or by the Participant’s guardian or other
legal representative, and shall not be assignable or transferable by Participant, in
whole or in part, other than by will or by the laws of descent and distribution.

	 	g.	 	2008 Equity and Incentive Plan. The Option evidenced by this Agreement
is granted pursuant to the Plan, a copy of which Plan has been made available to
Participant and is hereby incorporated into this Agreement. This Agreement is subject
to and in all respects limited and conditioned as provided in the Plan. The Plan
governs this Option and, except with respect to the lockup provisions contained in
Paragraph 4(g), in the event of any questions as to the construction of this Agreement
or in the event of a conflict between the Plan and this Agreement, the Plan shall
govern, except as the Plan otherwise provides.

	 	h.	 	Blue Sky Limitation. Notwithstanding anything in this Agreement to
the contrary, in the event the Company makes any public offering of its securities and
it is determined that it is necessary to reduce the number of issued but unexercised
stock purchase rights so as to comply with any state securities or Blue Sky law
limitations with respect thereto, and such determination is affirmed by the Board of
Directors, unless the Board of Directors determines otherwise, (i) the exercisability
of this Option and the date on which this Option must be exercised shall be
accelerated, provided that the Company agrees to give Participant 15 days’ prior
written notice of such acceleration, and (ii) any portion of this Option or any other
option granted to Participant pursuant to the Plan which is not exercised prior to or
contemporaneously with such public offering shall be canceled. Notice shall be deemed
given when delivered personally or when deposited in the United States mail, first
class postage prepaid and addressed to Participant at the address of Participant on
file with the Company.

	 	i.	 	Accounting Compliance. Participant agrees that, if a merger,
reorganization, liquidation or other “transaction” as defined in Section 11 of the Plan
occurs and Participant is an “affiliate” of the Company or any Affiliate (as defined in
applicable legal and accounting principles) at the time of such transaction,
Participant will comply with all requirements of Rule 145 of the Securities Act of
1933, as

 

 

	 	 	 	amended, and the requirements of such other legal or accounting principles,
and will execute any documents necessary to ensure such compliance.

	 	j.	 	Stock Legend. The Committee may require that the certificates for
any shares of Common Stock purchased by Participant (or, in the case of death,
Participant’s successors) shall bear an appropriate legend to reflect the restrictions
set forth in this Agreement; provided, however, that failure to so endorse any of such
certificates shall not render invalid or inapplicable Paragraph 4.

	 	k.	 	Scope of Agreement; Amendment. This Agreement shall bind and inure
to the benefit of the Company, its Affiliates and its successors and assigns and
Participant and any successor or successors of Participant permitted by Paragraph 2 or
Paragraph 5(f) above. Notwithstanding anything in this Agreement or the Plan to the
contrary, the Company expressly reserves the right to amend this Agreement without
Participant’s consent to the extent necessary or desirable to comply with Code Section
409A, and the regulations, notices and other guidance of general applicability issued
thereunder. Notwithstanding anything herein in this Agreement or the Plan to the
contrary, any provision of Paragraph 4 may be amended and the observance thereof may be
waived (either generally or in a particular instance and either retroactively or
prospectively), only by the written consent given by the Company and Investors holding
sixty-six percent (66%) of the then outstanding Series B Preferred Stock, and no
consent from the Participant shall be required unless such amendment or waiver creates
material additional obligations for the Participant under this Agreement which are
substantially different from any obligations imposed on holders of Common Stock under
the Investors Stockholders Agreement (in which case, the consent of participants under
restricted stock or option agreements who are bound by terms and conditions of similar
tenor to this Agreement who hold more than fifty percent (50%) of the total of all
restricted shares and option shares held by all such participants thereunder and
hereunder shall be required for any such amendment or waiver which does create such
material additional obligations).

 

 

          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed on the day
and year first above written.

	 	 	 	 	 
	 	FINGERHUT DIRECT MARKETING, INC

 	 
	 	By:  	 	 
	 	 	Its:

 	 
	 	
 	 
	 	Participantexv10w6wiv

Exhibit 10.6(iv)

RESTRICTED STOCK AGREEMENT

FINGERHUT DIRECT MARKETING, INC.

2008 EQUITY AND INCENTIVE PLAN

(CEO)

     THIS AGREEMENT, made effective as of this _______ day of ___________, _____ (the “Grant Date”)
by and between Fingerhut Direct Marketing, Inc., a Delaware corporation (the “Company”), and
__________________ (“Participant”).

W I T N E S S E T H:

     WHEREAS, Participant on the date hereof is a key employee or officer of the Company; and

     WHEREAS, the Company wishes to grant a restricted stock award to Participant for shares of the
Company’s Common Stock pursuant to the Company’s 2008 Equity and Incentive Plan (the “Plan”); and

     WHEREAS, the Committee has authorized the grant of a restricted stock award to Participant;

     NOW, THEREFORE, in consideration of the premises and of the mutual covenants herein contained,
the parties hereto agree as follows:

1. Grant of Restricted Stock Award. The Company hereby grants to Participant on the
Grant Date a restricted stock award (the “Award”) for [Insert Number of Shares] [•] shares of
Common Stock (the “Shares”) on the terms and conditions set forth herein, and subject to adjustment
pursuant to Section 11(b) of the Plan. Shares granted herein may be evidenced in such manner as the
Committee may determine. If certificates representing Shares are registered in the name of the
Participant, then the Company shall retain physical possession of the certificate until the Shares
represented by such certificate have vested in accordance with this Agreement. The Company shall
place a legend on any such certificate describing the risks of forfeiture and other transfer
restrictions set forth in this Agreement and providing for the cancellation and return of such
certificate if such Shares are forfeited as provided in Paragraph 2 below. Until such risks of
forfeiture have lapsed or the Shares subject to this Award have been forfeited pursuant to
Paragraph 2 below, Participant shall be entitled to vote the Shares and shall receive all dividends
attributable to such Shares, but Participant shall not have any other rights as a shareholder with
respect to such Shares. Capitalized terms not defined herein shall have the meanings set forth in
the Plan.

 

 

2. Vesting of Restricted Stock.

	 	a.	 	Except as otherwise provided herein, the Shares subject to this Award shall
remain forfeitable until the vesting dates set forth below:

	 	 	 	 	 
	Vesting Date	 	Number of Shares	 	Percentage
	November 21, 2008

	 	F•]
	 	20%
	May 21, 2009

	 	F•]
	 	20%
	May 21, 2010

	 	F•]
	 	20%
	May 21, 2011

	 	F•]
	 	20%
	May 21, 2012

	 	F•]
	 	20%

	 	 	 	Notwithstanding anything herein to the contrary, in the event a Public Offering
becomes effective prior to July 31, 2010, the tranche of Shares scheduled to vest on
May 21, 2012 shall become fully vested on the date such Public Offering becomes
effective.

	 	b.	 	Termination of Employment — General. Except as otherwise provided
in Paragraph 2(c), if the Participant’s Employment with the Company and its Affiliates
is terminated for any reason, including Participant’s voluntary resignation or
retirement, at any time prior to the vesting date for the Award, the Participant shall
immediately forfeit all unvested Shares.

	 	c.	 	Termination of Employment — Death or Disability. If Participant’s
Employment with the Company and its Affiliates is terminated because of death or
Disability, all unvested Shares held by the Participant at the time of such termination
shall become immediately vested and the risks of forfeiture on such unvested Shares
shall immediately lapse.

	 	d.	 	Nontransferability. Unless and until the Shares vest as provided in
this Agreement, such Shares may not be transferred, sold, assigned, pledged, alienated,
attached or otherwise encumbered (collectively, a “Transfer”), and any purported
Transfer will be void and unenforceable against the Company. No attempt to transfer any
unvested Shares, whether voluntary or involuntary, shall vest the purported transferee
with any interest or right in or with respect to such Shares.

3. Stockholders Agreement and Investor Rights Agreement. The Participant acknowledges
and agrees that the shares of Common Stock issued to the Participant pursuant to this Agreement
that have vested pursuant to Paragraph 2 or 5 hereof shall be subject in all respects to the
Amended and Restated Stockholders Agreement dated as of May 15, 2008, among the Company and the
investors named therein, as such agreement is amended, modified or replaced from time to time and
the Amended and Restated Investor Rights Agreement dated as of May 15, 2008, among the Company and
the investors named therein, as such agreement is amended, modified or replaced from time to time.

4. Miscellaneous.

 

 

	 	a.	 	No Right to Employment. This Agreement shall not confer on
Participant any right with respect to continuance of Employment by the Company and its
Affiliates, nor will it interfere in any way with the right of the Company to terminate
such Employment. Nothing in this Agreement shall be construed as creating an employment
contract for any specified term between Participant and the Company or any Affiliate.

	 	b.	 	Nonsolicitation. The Participant agrees that during the period of
his Employment with the Company or any of its Affiliates and for the one (1) year
period immediately following termination of such Employment for any reason, the
Participant shall not (i) directly or indirectly, engage in the recruiting, soliciting
or inducing of any nonclerical employee or employees of the Company or Affiliates to
terminate their employment with, or otherwise cease their relationship with the Company
or any of its Affiliates, or in hiring or assisting another person or entity to hire
any nonclerical employee of the Company or any of its Affiliates or any person who
within six (6) months before had been a nonclerical employee of the Company or any of
their Affiliates and were recruited or solicited for such employment or other retention
while an employee of the Company (other than any of the foregoing activities engaged in
with the prior written approval of the Company); or (ii) directly or indirectly
solicit, induce or encourage or attempt to persuade any agent, supplier or customer of
the Company or any Affiliate to terminate such agency or business relationship. The
Participant acknowledges that if (x) the Participant breaches any term or condition
contained in this paragraph 4(b) and (y) the Company provides the Participant with
written notice of such breach, then all Shares subject to this Award shall be
automatically forfeited (whether then vested or unvested).

	 	c.	 	Securities Law Compliance. Participant shall not transfer or
otherwise dispose of the Shares received pursuant to this Agreement until such time as
counsel to the Company shall have determined that such transfer or other disposition
will not violate any state or federal securities laws. Participant may be required by
the Company, as a condition of the effectiveness of this restricted stock award, to
agree in writing that all Shares subject to this Agreement shall be held, until such
time that such Shares are registered and freely tradable under applicable state and
federal securities laws, for Participant’s own account without a view to any further
distribution thereof, that the certificates for such shares shall bear an appropriate
legend to that effect and that such shares will be not transferred or disposed of
except in compliance with applicable state and federal securities laws.

	 	d.	 	Shares Reserved. The Company shall at all times during the term of
this Agreement reserve and keep available such number of shares of Common Stock as will
be sufficient to satisfy the requirements of this Agreement.

	 	e.	 	Withholding Taxes. In order to permit the Company to comply with all
applicable federal or state income tax laws or regulations, the Company may take such
action as it deems appropriate to insure that, if necessary, all applicable federal or
state payroll, income or other taxes are withheld from any amounts payable by

 

 

	 	 	 	the Company to Participant. If the Company is unable to withhold such federal and state
taxes, for whatever reason, Participant hereby agrees to pay to the Company an
amount equal to the amount the Company would otherwise be required to withhold under
federal or state law.

	 	f.	 	2008 Equity and Incentive Plan. The Award evidenced by this Agreement
is granted pursuant to the Plan, a copy of which Plan has been made available to
Participant and is hereby incorporated into this Agreement. This Agreement is subject
to and in all respects limited and conditioned as provided in the Plan. The Plan
governs this Agreement. In the event of any questions as to the construction of this
Agreement or in the event of a conflict between the Plan and this Agreement, the Plan
shall govern.

	 	g.	 	Blue Sky Limitation. Notwithstanding anything in this Agreement to
the contrary, in the event the Company makes any public offering of its securities and
determines, in its sole discretion, that it is necessary to reduce the number of issued
but unexercised stock purchase rights so as to comply with any state securities or Blue
Sky law limitations with respect thereto, the Board of Directors of the Company shall
accelerate the vesting of this restricted stock award, provided that the Company gives
Participant 15 days’ prior written notice of such acceleration. Notice shall be deemed
given when delivered personally or when deposited in the United States mail, first
class postage prepaid and addressed to Participant at the address of Participant on
file with the Company.
	 
	 	i.	 	Accounting Compliance. Participant agrees that, if a merger,
reorganization, liquidation or other “transaction” as defined in Section 11(b) of the
Plan occurs, and Participant is an “affiliate” of the Company or any Affiliate (as
defined in applicable legal and accounting principles) at the time of such transaction,
Participant will comply with all requirements of Rule 145 of the Securities Act of 1933,
as amended, and the requirements of such other legal or accounting principles, and will
execute any documents necessary to ensure such compliance.
	 
	 	j.	 	Stock Legend. The Committee may require that the certificates for any
Shares purchased by Participant (or, in the case of death, Participant’s successors)
shall bear an appropriate legend to reflect the restrictions set forth in this
Agreement; provided, however, that failure to so endorse any of such certificates shall
not render invalid or inapplicable Paragraph 3.
	 
	 	k.	 	Scope of Agreement; Amendment. This Agreement shall bind and inure to
the benefit of the Company, its Affiliates and its successors and assigns and
Participant and any successor or successors of Participant permitted by this Agreement.
Notwithstanding anything in this Agreement or the Plan to the contrary, the Company
expressly reserves the right to amend this Agreement without Participant’s consent to
the extent necessary or desirable to comply with Code Section 409A, and the regulations,
notices and other guidance of general applicability issued thereunder.

 

 

5. Change of Control. In the event of a Change of Control, the Shares shall become fully
vested and the risks of forfeiture on the Shares shall immediately lapse as of the occurrence of
such Change of Control.

 

 

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed on the day
and year first above written.

	 	 	 	 	 
	 	FINGERHUT DIRECT MARKETING, INC.

 	 
	 	By:  	 	 
	 	 	Its:

 	 
	 	
 	 
	 	Participant

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