Document:

EX10.5 1Q FY2013

Exhibit 10.5
	
		
	
	RESTRICTED STOCK
AWARD AGREEMENT

	 
	 

	Participant:
	______________________________________

	Award Number:
	______________________________________

	Plan:
	2004 Long-Term Incentive Compensation Plan

	Award Type:
	Restricted Stock

	Grant Date:
	______________________________________

	Number Shares:
	______________________________________

	Purchase Price:
	$0.00

	Restriction Period:
	Grant Date through ______________________

Cree, Inc. (the “Company”) has awarded you _______ shares (the “Shares”) of the common stock of the Company (the “Restricted Stock”) effective __________________, the Grant Date of the Award, pursuant to the Cree, Inc. 2004 Long-Term Incentive Compensation Plan (the “Plan”) and the terms of this Restricted Stock Award Agreement (the “Agreement”).
The Restricted Stock will be held in escrow by the Company until vested or forfeited. In accordance with this Agreement and the Plan, upon any Termination of Service (as defined in this Agreement) before the end of the Restriction Period, all Restricted Stock that is not then vested will be forfeited. If not previously vested or forfeited, the Restricted Stock will vest at 12:00 a.m. local time in Durham, NC in installments as follows, provided that you have not experienced a Termination of Service prior to the indicated vesting date:
___ Shares on ______________;
___ additional Shares on _____________;
___ additional Shares on _____________; and
___ additional Shares on _____________.

Capitalized terms defined in the Plan and used in this Agreement without definition have the meaning specified in the Plan.
THE TERMS AND CONDITIONS ON THE PAGES FOLLOWING THIS SIGNATURE PAGE, INCLUDING ANY APPENDIX, ARE AN INTEGRAL PART OF THIS AGREEMENT AND ARE INCORPORATED HEREIN BY THIS REFERENCE. BY SIGNING BELOW YOU ACKNOWLEDGE THAT YOU HAVE READ, UNDERSTAND AND AGREE TO BE BOUND BY SUCH TERMS AND CONDITIONS.  FAILURE TO SIGN WILL RESULT IN FORFEITURE OF THE AWARD.

Dated:    ______________________

FOR CREE, INC.:                           ACCEPTED AND AGREED:
	
			
	

/s/ CHARLES M. SWOBODA
	 
	

	Charles M. Swoboda, Chairman, President
     and Chief Executive Officer
	 
	 

TERMS AND CONDITIONS

1.    Grant of Restricted Stock.  Subject to the terms of the Plan and this Agreement, the Company hereby grants you the Restricted Stock as set forth on the first page of this Agreement. Shares issued pursuant this Award will be registered in your name and evidenced by one or more certificates delivered to and deposited with the Secretary of the Company as escrow agent or, at the discretion of the Company, held in a restricted book entry account in lieu of issuing a certificate or certificates. Such certificates or such book entry shares are to be held by the escrow agent until the Restricted Stock vests, at which time the escrow agent will release the vested Shares, or is forfeited; provided, however, that a portion of the Shares may be surrendered in payment of required withholding taxes in accordance with Section 8(b) below, unless alternative procedures for the payment of required withholding taxes are established by the Company.
2.    Vesting.  The Restricted Stock will vest in accordance with the schedule set out on the first page of this Agreement and will become fully vested, to the extent not already vested, upon your Termination of Service on account of your death or Disability, unless otherwise provided in this Agreement or the Plan.
3.    Forfeiture of Restricted Stock upon Termination of Service.  Except as otherwise provided in this Agreement or the Plan, upon your Termination of Service, you will forfeit all of the Restricted Stock that is not vested as of the date of your Termination of Service.
4.    Forfeiture of Restricted Stock upon Section 83(b) Election.  As permitted under Section 15.6 of the Plan, this Award is conditioned upon and subject to your not making an election under Section 83(b) of the Code with respect to the Restricted Stock. If you make an election under Section 83(b) of the Code with respect to any of the Restricted Stock, you will forfeit such Restricted Stock.
5.    Forfeiture of Restricted Stock for Awards Not Timely Accepted.  This Award is conditioned upon and subject to your accepting the Award by signing and delivering to the Company this Agreement no later than the first date Shares are scheduled to vest pursuant to the Award. In the event of your death or incapacitation prior to accepting the Award, the Company will deem the Award as being accepted. If the Company issues the Restricted Stock pursuant to an Award prior to your acceptance of the Award, and if you fail to accept the Award within the time described above, you will forfeit such Restricted Stock.
6.    Settlement of Restricted Stock.  As soon as administratively practicable following the vesting of any portion of this Award, the Company shall deliver to you (or, in the event of your death, to your estate or, if the Committee establishes a beneficiary designation procedure pursuant to Section 11 of the Plan, to any beneficiary that you have designated pursuant to such procedure) one or more certificates for the vested Shares or in the Company's discretion may cause the vested Shares to be deposited in an account maintained by a broker designated by the Company.
7.    Responsibility for Taxes.
(a)    For purposes of this Agreement, “Tax-Related Items” means any or all income tax, social insurance tax, payroll tax, payment on account or other tax-related items that may be applicable to this Award by law or regulation of any governmental authority, whether federal, state or local, domestic or foreign. Regardless of any action the Company takes with respect to withholding Tax-Related Items, you acknowledge that you are ultimately responsible for all Tax-Related Items and that such Tax-Related Items may exceed the amount actually withheld by the Company or the Employer. You further acknowledge that the Company and/or the Employer (1) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Restricted Stock, including, without limitation, the grant, vesting or release of the Restricted Stock, the subsequent sale of Shares and the receipt of any dividends or dividend equivalents pursuant to Shares; and (2) do not commit to and are under no obligation to structure the terms of the grant or any aspect of the Restricted Stock to reduce or eliminate your liability for Tax-Related Items or to achieve any particular tax result. Furthermore, if you have become subject to tax in more than one jurisdiction between the Grant Date and the date of any relevant taxable event, you acknowledge that the Company and/or the Employer (or former Employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction.
(b)    Prior to any relevant taxable or tax withholding event, as applicable, you will pay or make adequate arrangements satisfactory to the Company and/or the Employer to satisfy all Tax-Related Items. In this regard, you authorize the Company and/or the Employer, or their respective agents, at their discretion, to satisfy the obligations with regard to all Tax-Related Items by one or a combination of the following: (1) withholding from your wages or other cash compensation paid to you by the Company and/or the Employer; or (2) selling or arranging for the sale of Shares that you acquire under the Plan; or (3) withholding of Shares consistent with the “Share Withholding” provisions under Section 13.2 of the Plan.

(c)    Depending upon the withholding method, the Company or the Employer may withhold or account for Tax-Related Items by considering applicable minimum or maximum statutory withholding amounts or other applicable withholding rates. In the event Tax-Related Items are over-withheld, you will receive a refund in cash for any over-withheld amounts and will have no entitlement to the Shares equivalent. If the obligation for Tax-Related Items is satisfied by withholding of Shares, you shall be deemed, for tax purposes, to have been issued the full number of Shares, notwithstanding that a number of Shares is held back solely for the purpose of paying the Tax-Related Items due as a result of any aspect of your participation in the Plan.
(d)    You shall pay to the Company or the Employer any amount of Tax-Related Items that the Company or the Employer may be required to withhold or account for as a result of your participation in the Plan that cannot be satisfied by the means previously described. The Company may refuse to honor the vesting of the Restricted Stock and refuse to release from escrow the Shares if you fail to comply with your obligations in connection with the Tax-Related Items.
8.    Transfer of Restricted Stock.  The Restricted Stock and any rights under this Agreement may not be assigned, pledged as collateral or otherwise transferred, except as permitted by the Plan, nor may the Restricted Stock or such rights be subject to attachment, execution or other judicial process until the Restricted Stock becomes vested pursuant to Section 2 above. In the event of any attempt to assign, pledge or otherwise dispose of the Restricted Stock which is not then vested, or any rights under this Agreement, except as permitted by the Plan, or in the event of the levy of any attachment, execution or similar judicial process upon the rights or interests with respect to the Restricted Stock which is not then vested, the Committee may in its discretion, upon notice to you, cause you to forfeit such Restricted Stock.
9.    Rights Prior to Vesting of Shares of Restricted Stock.
(a)    You will have at all times all rights as a shareholder with respect to the Restricted Stock, including, but not limited to, voting rights and rights to receive dividends, except for the right to transfer the Restricted Stock as set forth in Section 9 above; provided, however, that any dividends on the Restricted Stock will be automatically deferred and reinvested in additional Restricted Stock subject to the same restrictions as the underlying Restricted Stock.
(b)    In the event of a change in capitalization within the meaning of Section 4.3 of the Plan, the number and class of Shares or other securities that you are entitled to pursuant to this Agreement shall be appropriately adjusted or changed as determined by the Committee to reflect the change in capitalization, provided that any such additional Shares or additional or different shares of securities shall remain subject to the restrictions in this Agreement.
10.    Termination of Service.
(a)    Unless otherwise provided in this Agreement or the Plan, for purposes of this Agreement “Termination of Service” means the discontinuance of your relationship with the Company as an employee of the Company or the Employer or any subsidiary or affiliate of the Company under the Plan or as a member of the Board of Directors of Cree, Inc. Except as determined otherwise by the Committee, you will not be deemed to have incurred a Termination of Service if the capacity in which you provide services to the Company changes (for example, you change from being a non-employee director to being an employee) or if you transfer employment among the various subsidiaries or affiliates of the Company constituting the Employer, so long as there is no interruption in your provision of services to the Company or other Employer as an employee or as a non-employee member of the Board of Directors of Cree, Inc. The Committee, in its discretion, will determine whether you have incurred a Termination of Service. You will not be deemed to have incurred a Termination of Service during a period for which you are on military leave, sick leave, or other leave of absence approved by the Employer.
(b)    If you are deemed to have incurred a Termination of Service other than a Termination of Service on account of your death or Disability, your right to vest in the Restricted Stock under this Agreement or the Plan, if any, will terminate effective as of the date that you are no longer actively providing services to the Company or one of its subsidiaries or affiliates (regardless of the reason for the termination and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where you are employed or the terms of your employment agreement, if any), and will not be extended by any notice period mandated under local law (e.g., active employment would not include a period of “garden leave” or similar period mandated under the employment laws in the jurisdiction where you are employed or the terms of your employment agreement, if any); the Committee, in its discretion, will determine when you are no longer actively providing services for purposes of this Award (including whether you may still be considered to be providing services while on a leave of absence).
11.    Provisions of the Plan.  The provisions of the Plan are incorporated by reference in this Agreement as if set out in full in this Agreement. To the extent that any conflict may exist between any other provision of this Agreement and a provision of the Plan, the Plan provision will control. All decisions of the Committee with respect to the interpretation, construction and application of the Plan or this Agreement shall be final, conclusive and binding upon you and the Company.

12.    Detrimental Activity.  The Committee in its sole discretion may cancel and cause to be forfeited any Shares of the Restricted Stock not previously vested or released from escrow under this Agreement if you engage in any "Detrimental Activity” (as defined below). In addition, if you engage in any Detrimental Activity prior to or within one (1) year after your Termination of Service, the Committee in its sole discretion may require you to pay to the Company the amount of all gain you realized from any vesting of Shares of the Restricted Stock beginning six (6) months prior to your Termination of Service, provided that the Committee gives you notice of such requirement within one (1) year after your Termination of Service. In that event, the Company will be entitled to setoff such amount against any amount the Company owes to you, in addition to any other rights the Company may have. For purposes of this section:
(a)    “Company” includes Cree, Inc. and all other Employers under the Plan.
(b)    “Detrimental Activity” means any of the following conduct, as determined by the Committee in good faith:
(1)    the performance of services for any Competing Business (as defined below), whether as an employee, officer, director, consultant, agent, contractor or in any other capacity, except to the extent expressly permitted by any written agreement between you and the Company;
(2)    the unauthorized disclosure or use of any trade secrets or other confidential information of the Company;
(3)    any attempt to induce an employee to leave employment with the Company to perform services elsewhere, or any attempt to cause a customer or supplier of the Company to curtail or cancel its business with the Company;
(4)    breach of any confidentiality, noncompetition, nonsolicitation or nondisparagement obligations, or any obligations relating to the disclosure, assignment or protection of inventions, undertaken by you in any written agreement between you and the Company; or
(5)    any act of fraud, misappropriation, embezzlement, or tortious or criminal behavior that adversely impacts the Company.
(c)    “Competing Business” means any corporation, partnership, university, government agency or other entity or person (other than the Company) that is conducting research directed to, developing, manufacturing, marketing, distributing, or selling any product, service, or technology that is competitive with any part of the Company's Business (as defined below). "Company's Business" means the development, manufacture, marketing, distribution, or sale of, or the conduct of research directed to, any product, service, or technology that the Company is developing, manufacturing, marketing, distributing, selling, or conducting research directed to, at any time during your employment or other relationship with the Company, except that following your Termination of Service the Company's Business will be determined as of the time of such termination. As of the effective date of this Agreement, the Company's Business includes but is not limited to the conduct of research directed to, development, manufacture, marketing, distribution, and/or sale of the following products, services, and technologies: (1) silicon carbide (SiC) materials for electronic applications; (2) SiC materials for gemstone applications; (3) AIII nitride materials for electronic applications; (4) light-emitting diode (LED) devices and components; (5) power semiconductor devices made using SiC and/or AIII nitride materials and components incorporating such devices; (6) radio frequency (RF) and microwave devices made using SiC and/or AIII nitride materials and components and modules incorporating such devices; (7) LED backlights for liquid crystal displays (LCDs); (8) lighting products, modules, fixtures or devices incorporating any of the above materials or technology; and (9) other semiconductor devices made using SiC and/or AIII nitride materials and components incorporating such devices. You acknowledge that during your employment or other relationship with the Company the Company's Business may expand or change and you agree that any such expansions and changes shall expand or contract the definition of the Company's Business accordingly.
13.    Data Privacy.  You hereby explicitly and unambiguously consent to the collection, use and transfer, in electronic or other form, of your personal data as described in this Agreement and any other grant materials (“Data”) by and among, as applicable, your Employer, the Company and its subsidiaries and affiliates, for the exclusive purpose of implementing, administering and managing your participation in the Plan.
You understand that the Employer holds or may hold certain personal information about you, including, but not limited to, your name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, position title, any shares of stock or directorships held in the Company, details of the Restricted Stock or any other entitlement to Shares awarded, canceled, exercised, vested, unvested or outstanding in your favor, for the purpose of implementing, administering and managing the Plan.

You understand that Data may be transferred to any third parties as may be selected by the Company currently or in the future, which are assisting the Company in the implementation, administration and management of the Plan. You understand that these recipients may be located in the United States or elsewhere, and that the recipient's country (e.g., the United States) may have different data privacy laws and protections than your country. You understand that you may request a list with the names and addresses of any potential recipients of the Data by contacting the Company's Stock Plan Administrator. You authorize the Company and any other possible recipients that may assist the Company (presently or in the future) with implementing, administering and managing the Plan to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing your participation in the Plan, including any requisite transfer of such Data as may be required to a broker or other third party whom you subsequently may elect to deposit any Shares acquired under the Plan. You understand that Data will be held pursuant to this Agreement only as long as the Company considers it necessary to implement, administer and manage your participation in the Plan. You understand that you may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents above, in any case without cost, by contacting in writing the Company's Stock Plan Administrator. Further, you understand that you are providing the consents herein on a purely voluntary basis. If you do not consent, your employment status or service and career with the Employer will not be adversely affected; the only adverse consequence of refusing or withdrawing consent is that the Company would not be able to grant you the Restricted Stock or any other equity awards or administer or maintain such awards. Therefore, you acknowledge, however, that refusing or withdrawing your consent may affect your ability to participate in the Plan. For more information on the consequences of your refusal to consent or withdrawal of consent, you may contact the Stock Plan Administrator of the Company.
14.    Language.  If you have received this Agreement or any other document related to the Plan translated into a language other than English and if the translated version differs in meaning from the English version, the English version will control.
15.    Electronic Delivery.  The Company may, in its sole discretion, deliver any documents related to current or future participation in the Plan by electronic means. You hereby consent to receive such documents by electronic delivery and agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company. Signed documents delivered to either party via facsimile or in portable document format will have the same effect as an original, unless otherwise required by applicable law.
16.    General.
(a)    Nothing in this Agreement will be construed as: (1) constituting a commitment, agreement or understanding of any kind that the Company or any other Employer will continue your employment or other relationship with the Company; or (2) limiting or restricting either party's right to terminate your employment or other relationship.
(b)    This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and permitted assigns. You may not assign any rights under this Agreement without the written consent of the Company, which it may withhold in its sole discretion; any such attempted assignment without the Company's written consent shall be void. The Company may assign its rights under this Agreement at any time upon notice to you.
(c)    Notices under this Agreement must be in writing and delivered either by hand or by a reputable domestic or international carrier (postage prepaid and return receipt or proof of delivery requested), and, in the case of notices to the Company, addressed to its principal executive offices to the attention of the Stock Plan Administrator, and, in your case, addressed to your address as shown on the Employer's records.
(d)    This Agreement shall be governed by and construed in accordance with the laws of the State of North Carolina without regard to the conflict of law provisions thereof, as if made and to be performed wholly within such State. For purposes of litigating any dispute that arises directly or indirectly from the relationship of the parties evidenced by the Award or this Agreement, the parties hereby submit to and consent to the exclusive jurisdiction of the State of North Carolina, agree that such litigation shall be conducted in the courts of Durham County, North Carolina, or the federal courts for the United States for the Middle District of North Carolina, and no other courts, where  the Award of Restricted Stock is made and/or to be performed.
(e)    If any provision of this Agreement is held to be invalid or unenforceable, such determination shall not affect the other provisions of the Agreement and the Agreement shall be construed as if the invalid or unenforceable provision were omitted and a valid and enforceable provision, as nearly comparable as possible, substituted in its place.
(f)    Notwithstanding any prior award agreement between you and the Company under which Restricted Stock may have been awarded, this Agreement and the Plan set forth all of the promises, agreements and understandings between you 

and Company relating to the Restricted Stock granted pursuant to this Agreement, constitutes the complete agreement between the parties regarding the Restricted Stock and replaces any prior oral or written communications regarding the same.
(g)    Shares issued pursuant to this Award may be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under applicable law or the rules and regulations of the U.S. Securities and Exchange Commission or any stock exchange or trading system upon which the common stock of the Company is listed, and the Committee may cause a legend or legends to be placed on any such certificates or the stock records of the Company to make appropriate reference to such restrictions.
(h)    You agree that the Restricted Stock, even if later forfeited, serves as additional, valuable consideration for your obligations, if any, undertaken in any existing agreement between you and the Company and/or other Employer regarding confidential information, noncompetition, nonsolicitation or similar covenants.
(i)    You acknowledge, represent and warrant to the Company, and agree with the Company, that (i) except for information provided in the Company's filings with the U.S. Securities and Exchange Commission and in the Company's current prospectus relating to the Plan, you have not relied and will not rely upon the Committee, the Company, an Employer or any employee or agent of the Company or an Employer in determining whether to accept the Restricted Stock, or in connection with any disposition of Shares obtained pursuant to the Restricted Stock Award, or with respect to any tax consequences related to the grant of the Restricted Stock or the disposition of Shares obtained pursuant to the Restricted Stock Award; and (ii) you will seek from your own professional advisors such investment, tax and other advice as you believe necessary.
(j)    You acknowledge that you may incur a substantial tax liability as a result of vesting of the Restricted Stock. You assume full responsibility for all such consequences and the filing of all tax returns and related elections you may be required or find desirable to file. If you are required to make any valuation of Shares obtained pursuant to the Restricted Stock Award under any federal, state or other applicable tax law, and if the valuation affects any tax return or election of the Company or the Employer or affects the Company's financial statement reporting, you agree that the Company may determine the value and that you will observe any determination so made by the Company in all tax returns and elections filed by you.
(k)    You acknowledge that copies of the Plan and Plan prospectus are available upon written or telephonic request to the Company's Stock Plan Administrator.
17.    Severability.  The provisions of this Agreement are severable and if any one or more provisions is determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.
18.    Nature of Grant. In accepting this grant, you acknowledge, understand and agree that:
(a)    the Plan is established voluntarily by the Company, is discretionary in nature and may be modified, amended, suspended or terminated by the Company at any time, unless expressly provided otherwise in the Plan or the Agreement;
(b)    the grant of the Restricted Stock is voluntary and does not create any contractual or other right to receive future grants of Restricted Stock, or benefits in lieu of Restricted Stock, even if Restricted Stock has been granted repeatedly in the past;
(c)    all decisions with respect to future grants of Restricted Stock, if any, will be at the sole discretion of the Company;
(d)    your participation in the Plan is voluntary;
(e)    your participation in the Plan will not create a right to employment with the Company or the Employer and will not interfere with the ability of the Company, the Employer or any subsidiary or affiliate to terminate your employment or service relationship at any time;
(f)    if you are employed by a non-U.S. entity and provide services outside the U.S., the Restricted Stock is an extraordinary item that does not constitute compensation of any kind for services of any kind rendered to your Employer, and they are outside the scope of your employment or service contract, if any, with your Employer;
(g)    the grant of the Restricted Stock is not intended to replace any pension rights or compensation;
(h)    the grant of the Restricted Stock is not part of normal or expected compensation or salary for any purposes, including, but not limited to, calculating any severance, resignation, termination, redundancy, dismissal, end-of-service payments, bonuses, long-service awards, pension or retirement or welfare benefits or similar payments;

(i)    the grant of the Restricted Stock and your participation in the Plan will not be interpreted to form an employment or service contract or relationship with the Company, the Employer or any subsidiary or affiliate of the Company;
(j)    the future value of the Restricted Stock is unknown and cannot be predicted with certainty;
(k)    no claim or entitlement to compensation or damages shall arise from forfeiture of the Restricted Stock resulting from termination of your employment or service relationship by the Company or the Employer (for any reason whatsoever and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where you are employed or the terms of your employment agreement, if any), and, in consideration of the grant of the Restricted Stock, to which you otherwise are not entitled, you irrevocably agree (i) never to institute any such claim against the Company, the Employer, or any subsidiary or affiliate of the Company, (ii) to waive your ability, if any, to bring any such claim, and (iii) to release the Company and the Employer and any subsidiary or affiliate from any such claim; if, notwithstanding the foregoing, any such claim is allowed by a court of competent jurisdiction, then, by participating in the Plan, you shall be deemed irrevocably to have agreed not to pursue such claim and agree to execute any and all documents necessary to request dismissal or withdrawal of such claims;
(l)    the grant of the Restricted Stock and the benefits under the Plan, if any, will not automatically transfer to another company in the case of a merger, takeover, or transfer of liability;
(m)    neither the Company, the Employer nor any subsidiary or affiliate of the Company shall be liable for any foreign exchange rate fluctuation between your local currency and the United States Dollar that may affect the value of the Restricted Stock or if any payments due to you pursuant to the subsequent sale of any Shares acquired upon the vesting of the Restricted Stock; and
(n)    this award and any other award(s) granted under the Plan on the Grant Date are intended to fulfill any and all agreements, obligations or promises, whether legally binding or not, previously made by the Company or another Employer under the Plan to grant you the Restricted Stock or other rights to common stock of the Company. By signing this Agreement, you accept such awards, along with all prior awards received by you, in full satisfaction of any such agreement, obligation or promise.
19.    No Advice Regarding Grant. The Company is not providing any tax, legal, or financial advice, nor is the Company making any recommendations regarding your participation in the Plan or sale of Shares. You are hereby advised to consult with your own personal tax, legal and financial advisors regarding your participation in the Plan before taking any action related to the Plan.
20.    Compliance with Law. Notwithstanding any other provision of the Plan or this Agreement, unless there is an available exemption from any registration, qualification or other legal requirement applicable to the Restricted Stock, the Company shall not be required to deliver any shares of the Restricted Stock prior to the completion of any registration or qualification of the shares under any local, state, federal or foreign securities or exchange control law or under rulings or regulations of the U.S. Securities and Exchange Commission (“SEC”) or of any other governmental regulatory body, or prior to obtaining any approval or other clearance from any local, state, federal or foreign governmental agency, which registration, qualification or approval the Company shall, in its absolute discretion, deem necessary or advisable. You understand that the Company is under no obligation to register or qualify the Restricted Stock with the SEC or any state or foreign securities commission or to seek approval or clearance from any governmental authority for the issuance of the Restricted Stock. Further, you agree that the Company shall have unilateral authority to amend the Plan and the Agreement without your consent to the extent necessary to comply with securities or other laws applicable to issuance of shares.
21.    Waiver. You acknowledge that a waiver by the Company of breach of any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach by you or any other participant.
22.    Appendix.  Notwithstanding any provisions in this Agreement, this Award shall be subject to any special terms and conditions set forth in any Appendix to this Agreement for your country to the extent that the Company determines that the application of such terms and conditions is necessary or advisable in order to comply with local law or to facilitate the administration of the Plan. Moreover, if you relocate to or from one of the countries included on any such Appendix, the special terms and conditions for the country you are moving from and/or the country you are moving to will apply to you to the extent that the Company determines that the application of such terms and conditions is necessary or advisable in order to comply with local law or to facilitate the administration of the Plan. If included, the Appendix is incorporated in and constitutes part of this Agreement.

23.    Imposition of Other Requirements.  The Company reserves the right to impose other requirements on your participation in the Plan, on the Restricted Stock and on any Shares acquired under the Plan, to the extent that the Company determines it is necessary or advisable in order to comply with local law or to facilitate the administration of the Plan, and to require you to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.mm10-1612_8ke101.htm

 

EXHIBIT 10.1

 

 

 

AMENDMENT NO. 1

TO

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

This Amendment No. 1 to Amended and Restated Employment Agreement (the “Amendment”) is by and between MoneyGram International, Inc., a Delaware corporation (together with its direct and indirect subsidiaries, successors and permitted assigns under this Agreement, the “Company”) and Pamela H. Patsley (“Executive”) dated and effective October 12, 2012 (the “Effective Date”).

 

RECITALS

 

WHEREAS, the Company and Executive previously entered an Amended and Restated Employment Agreement, dated as of September 1, 2009 (the “Employment Agreement”);

 

WHEREAS, Section 14(b) of the Employment Agreement permits the parties to amend the Employment Agreement by written agreement;

 

WHEREAS, Executive and the Company wish Executive to remain employed by the Company through the Expiration Date, and the Company wishes to afford itself the opportunity to extend Executive’s employment for a longer period;

 

WHEREAS, if the Company and Executive do not agree to extend the Employment Term beyond the Expiration Date the Company wishes to afford the executive the opportunity to retire at the Expiration Date; and

 

WHEREAS, in recognition of Executive’s past and future contributions to the Company, the Company and Executive desire to amend the Employment Agreement according to the terms and conditions set forth in this Amendment.

 

NOW, THEREFORE, in consideration of the mutual promises, agreements, and consideration set forth below, the parties agree to the following terms:

 

TERMS

 

1. Retirement or Extension of Employment Term.  As of the Effective Date, an additional sentence shall be added to the end of Section 1 of the Employment Agreement that shall read as follows:

 

“Notwithstanding the foregoing, prior to the Expiration Date the Company may offer to extend the Employment Term beyond August 31, 2013 pursuant to an employment agreement in accordance with the terms described on Exhibit C hereto, the effectiveness of which would commence following the Expiration Date or, at an earlier date, with the consent of Executive (the “New Employment Agreement”). If the Company does not offer Executive the opportunity to enter into the New Employment Agreement, Executive shall have the opportunity to retire at the Expiration Date. If the Company offers to enter into the New Employment Agreement and Executive declines such offer, Executive’s employment shall terminate and the Employment Period shall expire on the Expiration Date.”

 

 

  

  

  

 

 

2. Severance upon Termination without Cause or Resignation for Good Reason. As of the Effective Date, Section 8(b)(iii)(B) of the Agreement shall be deleted in its entirety and replaced with the following:

 

“(B)(1) subject to Section 14(g)(i) hereof, payment in equal installments, in accordance with the Company’s normal payroll practices as in effect on the date of termination of Executive’s employment, over the two (2) year period following Executive’s termination of employment, of an aggregate amount equal to two times the sum of (i) the Base Salary and (ii) Executive’s target bonus amount then in effect under the MIP; provided that the first payment shall be made on the next regularly scheduled payroll date following the sixtieth (60th) day after Executive’s “separation from service” and shall include payment of any amounts that would otherwise be due prior thereto; and (2) provided that the Company actually achieves performance goals for the applicable performance period necessary for participants in the MIP to receive cash bonuses pursuant to the MIP with respect to such performance period and that such cash bonuses are actually paid, a pro-rata portion of Executive’s bonus under the MIP for the fiscal year in which Executive’s termination occurs (determined by multiplying the amount of such bonus, which would be due for the full fiscal year based on actual performance by a fraction, the numerator of which is the number of days during the fiscal year of termination that Executive is employed with the Company and the denominator of which is 365), payable on the date that bonuses under the MIP with respect to such fiscal year are payable to other senior executives of the Company in the fiscal year following the fiscal year to which the bonus relates;”

 

3. Equity and Equity-Based Awards.  As of the Effective Date, Section 8(b)(iii)(D) of the Agreement shall be deleted in its entirety and replaced with the following:

 

“(D)           with respect to each award of options to purchase shares of Common Stock (“Options”) (1) subject to performance-based vesting criteria that was granted in 2009, the full amount of each such award shall remain outstanding and eligible to vest following termination of employment until the fifth anniversary of the grant date of such option (i.e., the end of the performance period specified for such award) and, if such objectives are not achieved by such date, such award shall be forfeited for no consideration; (2) subject to time-based vesting criteria only that was granted in 2009 and 2011, the portion of each such award that would have vested during the 12 month period after the date of termination if such termination had not occurred shall be deemed vested on the date of termination; and (3) held by Executive shall remain exercisable until the earlier of (i) expiration of the ten year term of such Options, or (ii) the fifth (5th) anniversary of the date of termination of Executive’s employment to the extent such Options are either vested and exercisable on the date of termination or are Options subject to performance-based vesting criteria that become vested and exercisable during such post-termination period in accordance with Section 8(b)(iii)(D)(1).”

 

4. Severance upon Retirement.

 

(a) As of the Effective Date, the first sentence of Section 8(d) of the Agreement shall be deleted in its entirety and replaced with the following:

 

“Unless (i) Executive’s employment is earlier terminated pursuant to paragraphs (a), (b) or (c) of this Section 8, (ii) the Company and Executive agree to enter into the New Employment Agreement, or (iii) the Company offers to enter into the New Employment Agreement and Executive declines such offer, Executive shall be deemed to have retired 

 

 

 

  

2

  

 

 

from employment with the Company on the close of business on the day immediately preceding the Expiration Date and Executive shall be entitled to receive the same compensation and benefits as if Executive’s employment had been terminated pursuant to Section 8(b) hereof. If the Company and Executive agree to enter into the New Employment Agreement or the Company offers to enter into the New Employment Agreement and Executive declines such offer and, in either case, Executive’s employment continues uninterrupted through August 31, 2013, all Options held by Executive shall remain exercisable until the earlier of (i) expiration of the ten year term of such Options, or (ii) the fifth (5th) anniversary of the date of termination of Executive’s employment to the extent such Options are vested and exercisable on the date of termination.”

 

5. Governing Law. As of the Effective Date, Section 14(a) of the Agreement shall be deleted in its entirety and replaced with the following:

 

“This Agreement shall be governed by and construed in accordance with the laws of the State of Texas, without regard to conflicts of laws principles thereof.”

 

6. Entire Agreement/Amendments. As of the Effective Date, the first sentence of Section 14(b) of the Agreement shall be deleted in its entirety and replaced with the following:

 

“This Agreement and the other agreements, plans and documents referenced herein (including the Indemnification Agreement), the Non-Qualified Stock Option Agreement dated January 21, 2009, the Non-Qualified Stock Option Agreement dated May 12, 2009, the Non-Qualified Stock Option Agreement dated August 31, 2009, the Non-Qualified Stock Option Agreement dated January 21, 2009, the Non-Qualified Stock Option Agreement dated November 17, 2011, the Restricted Stock Unit Award Agreement dated November 17, 2011 and the Company’s charter and bylaws, contain the entire understanding of the parties with respect to the employment of Executive by the Company and supersede and incorporate any and all prior agreements, both written or oral, including but not limited to the Prior Employment Agreement.”

 

7. General.

 

(a) Except as specifically provided in this Amendment, the Employment Agreement will remain in full force and effect and is hereby ratified and confirmed.  To the extent a conflict arises between the terms of the Employment Agreement and this Amendment, the terms of this Amendment shall prevail.

 

(b) This Amendment shall be construed under and enforced in accordance with the laws of the State of Texas, without regard to the conflicts of law provisions thereof.  This Amendment constitutes the sole and entire agreement of the parties with respect to amendment of the Employment Agreement and supersedes all prior verbal and written understandings and agreements between the parties relating to its subject matter.  This Amendment may not be modified except in a writing signed by both parties.

 

(c) This Amendment may be executed in one or more counterparts, each of which shall be deemed an original and shall have the same effect as if the signatures hereto and thereto were on the same instrument.

 

  

3

  

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written.

 

	 	MONEYGRAM INTERNATIONAL, INC.	 
	 	 	 	 
	
 

	
By: 

	/s/ Francis Aaron Henrty	 
	 	Name: 	Francis Aaron Henrty	 
	 	Title:  	
Executive Vice President, General 

Counsel and Secretary

	 
	 	 	 	 
	 	 	 	 

 

	 	PAMELA H. PATSLEY	 
	 	 	 	 
	
 

	
By: 

	/s/ Pamela H. Patsley	 
	 	Date: 	October 12, 2012	 
	 	 	 	 
	 	 	 	 
	 	 	 	 

 

 

 

 

 

 

 

  

4

  

Exhibit C

 

Minimum Terms of New Employment Agreement

 

 

	
1.  

	
Term.  Until September 1, 2015.

 

 

	
2.  

	
Location.  Dallas, Texas.

 

 

	
3.  

	
Base Salary. At $925,000 (or, if greater, the Base Salary then in effect).

 

 

	
4.  

	
Annual Cash Bonus.  120% of Base Salary (or, if greater, the target bonus opportunity then in effect).

 

 

	
5.  

	
Annual Equity Awards.  Annual equity grants having an aggregate grant date value of at least four (4) times Executive Base Salary.

 

 

	
6.  

	
Change in Control:  Upon a Change in Control, all time vesting options will vest in full, and all performance-based awards shall vest on a pro-rated basis based on target.  Change in Control shall be defined consistently with the Company’s generally applicable practices for its senior officers or, if there are no such practices, in a manner consistent with generally applicable competitive practices at public companies.

 

 

	
7.  

	
Remaining Terms.  Except as otherwise specified above, the remaining terms of the Employment Agreement shall be at least as favorable to the Executive as are applicable under then effective Employment Agreement, including all amendments thereto.  Notwithstanding the foregoing, if Executive remains employed for the duration of the Term and the Company does not offer to further extend the Term prior to expiration, Executive shall not be entitled to severance compensation and benefits as if Executive’s employment has been terminated without Cause but rather shall receive the same compensation and benefits as if the Term had expired.

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