Document:

exh102april52010.htm

  

  

  

EXHIBIT 10.2

Grant _________________, 2010

CHARMING SHOPPES, INC.

2004 STOCK AWARD AND INCENTIVE PLAN

 

RESTRICTED STOCK UNITS AGREEMENT

 

Agreement (the “Agreement”), dated as of ______, 2010  (the “Grant Date”), between CHARMING SHOPPES, INC. (the “Company”) and  ___________________ (the “Employee”).

 

	
1.  

	
Grant of Restricted Stock Units; Consideration; Employee Acknowledgments.

 

The Company hereby confirms the grant, under the Company’s 2004 Stock Award and Incentive Plan (the “Plan”),  of __________ Restricted Stock Units (or “RSUs”) pursuant to the Plan.  The Restricted Stock Units are subject to the terms and conditions of the Plan and this Agreement (and, in the case of any elective deferral, the Company’s Variable Deferred Compensation Plan for Executives (the “Deferred Compensation Plan”)).  Employee is required to pay no cash consideration for the grant of the Restricted Stock Units, but performance of services prior to the expiration of the risk of forfeiture relating to the Restricted Stock Units and otherwise during his or her employment, and his or her agreement to abide by the terms set forth in the Plan, this Restricted Stock Units Agreement (the “Agreement”), and any Rules and Regulations under the Plan, shall be deemed to be consideration for this grant of Restricted Stock Units.  Employee acknowledges and agrees that (i) the Restricted Stock Units are nontransferable as provided in Section 3(d) hereof and the Plan, (ii) the Restricted Stock Units are subject to forfeiture in the event of Employee’s termination of employment in certain circumstances, as specified in Section 3 hereof, and (iii) sales of shares of the Company’s common stock, par value $0.10 per share (“Shares”), following the lapse of restrictions and settlement of the Restricted Stock Units will be subject to the Company’s policies regulating trading by employees, including any applicable “blackout” or other designated periods in which sales of Shares are not permitted.

 

	
2.  

	
Incorporation of Plan and Deferred Compensation Plan by Reference.

 

The Restricted Stock Units have been granted to Employee under the Plan.  All of the terms, conditions, and other provisions of the Plan are hereby incorporated by reference into this Agreement.  Capitalized terms used in this Agreement but not defined herein shall have the same meanings as in the Plan.  If there is any conflict between the provisions of this Agreement and the provisions of the Plan, the provisions of the Plan shall govern.  In addition, the terms of any deferral of settlement of the Restricted Stock Units are governed by the Deferred Compensation Plan, a copy of which previously has been provided to Employee, which terms are also incorporated herein by reference.  Employee hereby accepts the grant of Restricted Stock Units, acknowledges receipt of a copy of the Plan and the Deferred Compensation Plan, and agrees to be bound by all the terms and provisions hereof and thereof (as presently in effect or hereafter

 

  

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amended), and by all decisions and determinations of the Board or Committee under the Plan and the Deferred Compensation Plan, or any person or committee designated by the Committee to administer the Plan (the “Administrator”).

 

	
3.  

	
Restrictions on Restricted Stock Units.

 

(a) Nature of Restricted Stock Units; Restricted Period and Deferral of Settlement.  Each Restricted Stock Unit represents the right to receive one Share, which will be issued and delivered, after the lapse of the “Restricted Period” specified below to the extent the Restricted Stock Units have not been forfeited, at the settlement date applicable under Section 6.  Restricted Stock Units are subject to a risk of forfeiture during such Restricted Period and are subject to restrictions on transfer and other conditions during the Restricted Period and the additional deferral period, if any.  This Award differs from awards of “restricted stock” in that such restricted stock awards involve issuance of Shares at or shortly after grant, with such shares subject to forfeiture (i.e., such shares must be returned to the Company if forfeited) during any restricted period. With respect to Restricted Stock Units, Employee has no voting rights or rights to actual dividends prior to the end of the Restricted Period, but Employee is entitled to dividend equivalents in accordance with Section 4.

 

(b) Lapse of Restricted Period.  Unless the Restricted Period on Restricted Stock Units has lapsed earlier under Section 3(c) or 5(a), the Restricted Period will lapse according to the following schedule, subject to Employee’s continued employment with the Company or a subsidiary through the relevant vesting date:

 

	
Vesting Date

	
Restricted Stock Units for Which

the Restricted Period Lapses

	  	  
	
First Anniversary of the Grant Date

	
25%

	
Second Anniversary of the Grant Date

	
25%

	
Third Anniversary of the Grant Date

	
25%

	
Fourth Anniversary of the Grant Date

	
25%

The lapse of the Restricted Period for the Restricted Stock Units is cumulative, but shall not exceed 100%.

 

(c) Forfeiture and Termination of Employment.  Unless otherwise determined by the Committee, in the event of Employee’s Termination, and such Termination is for any reason other than due to death, Permanent Disability, Retirement or, more than one year after the Grant Date, involuntary Termination by the Company for reasons other than “Cause,” the Restricted Stock Units as to which the Restricted Period has not lapsed at or before such Termination shall be forfeited at the time of such Termination.  Accordingly, unless otherwise determined by the Committee, Employee’s voluntary Termination (other than due to Retirement) or Termination by the Company for Cause or, within one year after the Grant Date, involuntary Termination by the Company not for Cause will result in all Restricted Stock Units as to which the Restricted Period has not lapsed being immediately forfeited.  Vesting and forfeiture terms applicable to other terminations are as follows:

 

 

  

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(i) Death or Disability.  In the event of Employee’s Termination due to death or Permanent Disability, the Restricted Period on those Restricted Stock Units (if any) as to which the Restricted Period would have lapsed if employment had continued for six months after the Termination date will lapse on an accelerated basis at the time of such Termination, so those Restricted Stock Units will not be forfeited.  The other Restricted Stock Units as to which the Restricted Period has not lapsed at or before such Termination and would not lapse assuming continued employment for six months after the Termination date shall be forfeited at the time of such Termination.  The foregoing notwithstanding, in the event of Termination due to the death or Permanent Disability of Employee, if at the date of Termination Employee was eligible for Retirement, the Restricted Period shall lapse as to that number of Restricted Stock Units as to which the Restricted Period would have lapsed determined under subparagraph (iii) below if that number is greater than the number determined under this subparagraph (i).  The special disability rules specified in Section 11(g) of the Plan shall apply to determinations relating to disability hereunder.

 

(ii) Termination Not for Cause.  In the event of Employee’s Termination due to involuntary termination by the Company for reasons other than “Cause” more than one year after the Grant Date, the Restricted Period on those Restricted Stock Units (if any) as to which the Restricted Period would have lapsed if Employee’s employment had continued for three months after the Termination date will lapse on an accelerated basis at the time of such Termination, so those Restricted Stock Units will not be forfeited.  The other Restricted Stock Units as to which the Restricted Period has not lapsed at or before such Termination and would not lapse assuming continued employment for three months after the Termination date shall be forfeited at the time of such Termination.

 

(iii) Retirement.  In the event of Employee’s Termination due to Retirement, a portion of Employee’s Restricted Stock Units will not be forfeited upon such Retirement, but instead the Restricted Period on such unforfeited Restricted Stock Units shall remain in effect until the earlier of the next anniversary of the Grant Date or Employee’s death.  The number of such Restricted Stock Units that will not be forfeited (if any) will equal the product of (i) the number of Restricted Stock Units that would have become vested if Employee’s employment had contined through the next anniversary of the Grant Date (but disregarding any other event occurring prior to that next anniversary date) and (ii) a fraction, the numerator of which shall be the number of full and partial months that Employee has been employed by the Company or any of its subsidiaries between the Grant Date and the date of Retirement and the denominator of which shall be the number of full or partial months between the Grant Date and the next anniversary of the Grant Date after the date of Retirement.  During such post-Retirement period during which the Restricted Period remains in effect, the Restricted Stock Units shall be immediately forfeited if Employee: (A) directly or indirectly owns any equity or proprietary interest in any Competitor (as defined below) of the Company (except for ownership of shares in a publicly traded company not exceeding five percent of any class of outstanding securities), or is an employee, agent, director, advisor, or consultant to or for, any Competitor of the Company in the United States, whether on his or her own behalf or on behalf of any person, and is involved in the procuring, sale, marketing, promotion, or distribution of any product or product lines competitive with any product or product lines of the Company at the time of Employee’s

 

  

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Retirement, or if Employee assists in, manages, or supervises any of the foregoing activities, or (B) undertakes any action to induce or cause any supplier to discontinue any part of its business with the Company, or (C) attempts to induce any merchant, buyer, or manager or higher level employee of the Company to terminate his or her employment with the Company, or (D) discloses confidential or proprietary information of the Company to any person, firm, corporation, association, or other entity for any reason or purpose whatsoever, or makes use of any such information for his or her own purposes, so long as such information has not otherwise been disclosed to the public or is not otherwise in the public domain except as required by law or pursuant to administrative or legal process, or (E) makes any negative or disparaging statements about the professional or personal reputation of the Company, its officers, directors, or employees, except if testifying truthfully under oath pursuant to subpoena or other legal process.  A Termination for Cause shall not be deemed to be a Retirement.

 

(iv) Definitions.

 

(A) For purposes of this Agreement, “Cause” shall mean: (a) the Employee’s willful and continued failure to substantially perform his or her duties with the Company (other than any such failure resulting from a Permanent Disability), after a written demand for substantial performance is delivered to the Employee that specifically identifies the manner in which the Company believes that the Employee has willfully failed to substantially perform his or her duties, and after the Employee has failed to resume substantial performance of his or her duties on a continuous basis within 30 calendar days of receiving such demand; (b) the Employee’s willfully engaging in conduct (other than conduct covered under (a) above) which is demonstrably and materially injurious to the Company, monetarily or otherwise; or (c) the Employee’s having been convicted of a felony.  For purposes of this subparagraph, no act, or failure to act, on the Employee’s part shall be deemed “willful” unless done, or omitted to be done, by the Employee not in good faith and without reasonable belief that the action or omission was in the best interests of the Company.

 

(B) For purposes of this Agreement, “Competitor” shall mean any individual or organization that procures, sources, markets, promotes, sells or distributes any products or product lines that are, or are actually planned or under consideration to be, procured, sourced, marketed, promoted, sold or distributed by the Company during the Employee’s employment by the Company.

 

(C) For purposes of this Agreement, “Permanent Disability” shall mean the complete and permanent inability by reason of illness or accident to perform the duties of the occupation at which the Employee was employed when such disability commenced.

 

(D) For purposes of this Agreement, “Retirement” shall mean Employee’s voluntary Termination on or after the date Employee has attained the age of 62.

 

(E) For purposes of this Agreement, “Section 409A” shall mean Section 409A of the Internal Revenue Code, as from time to time amended, and regulations and guidance thereunder.

 

 

  

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(F) For purposes of this Agreement, “Termination” shall mean the termination of Employee’s employment immediately after which he or she is not an employee of the Company or any of its subsidiaries, subject to Section 7(b)(i).

 

(d) Nontransferability.  Restricted Stock Units and all related rights hereunder shall not be transferable or assignable by Employee other than by will or the laws of descent and distribution, and shall not be pledged, hypothecated, or otherwise encumbered in any way or subject to execution, attachment, lien, or similar process; provided, however, that Employee will be entitled to designate a beneficiary or beneficiaries to receive any distribution in respect of the Restriced Stock Units upon the death of Employee, in the manner and to the extent permitted by the Committee under Rules and Regulations adopted by the Committee under the Plan.

 

	
4.  

	
Employee’s Account, Dividend Equivalents and Adjustments.

 

(a) Account.  Restricted Stock Units are bookkeeping units, and do not constitute ownership of Shares or any other equity security.  The Company shall maintain a bookkeeping account for Employee (the “Account”) reflecting the number of Restricted Stock Units then credited to Employee hereunder as a result of this grant of Restricted Stock Units and any crediting of additional Restricted Stock Units to Employee pursuant to payments equivalent to dividends paid on Shares under Section 4(b) (“Dividend Equivalents”).

 

(b) Dividend Equivalents.  Dividend Equivalents shall be credited in accordance with the provisions of the Deferred Compensation Plan and the methodology specified by the Company for crediting dividend equivalents on Share units in effect from time to time thereunder.  It is understood that the intention hereunder is that Dividend Equivalents be credited in a manner that provides an economic benefit to Employee equivalent to dividends on Shares without undue administrative burdens on the Company.  Accordingly, no interest will be credited on any cash amount (if any) of such dividend equivalents from the dividend date to the time of settlement of the Restricted Stock Units.  Unless otherwise determined by the Committee, all Dividend Equivalents shall be deemed reinvested in additional Restricted Stock Units and shall be subject to the same risk of forfeiture, Restricted Period, and other restrictions and payment terms as apply to the original Restricted Stock Units.  Employee shall not be entitled to receive actual dividends in respect of Restricted Stock Units prior to the issuance of Shares in settlement thereof.

 

(c) Adjustments.  The number of Restricted Stock Units credited to Employee’s Account shall be adjusted by the Committee, in accordance with Section 10(c) of the Plan, in order to preserve without enlarging Employee’s rights with respect to such Restricted Stock Units.  Any such adjustment shall be made taking into account any crediting of Restricted Stock Units or cash to the Employee under Section 4(b) in connection with such transaction or event.

 

	
5.  

	
Change of Control.

 

(a) The following provisions shall apply in the event of a Change of Control:

 

 

  

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(i) In the event of a Change of Control at a time when the Employee is employed by the Company or any of its subsidiaries, if the acquiring company does not convert the Employee’s outstanding Restricted Stock Units into restricted stock units with respect to the stock of the acquiring company (or the parent of the acquiring company, if the acquiror is a subsidiary) that have the same economic value, vesting provisions and other terms as the Employee’s outstanding Restricted Stock Units, the Restricted Stock Units shall become fully vested and non-forfeitable immediately prior to the occurrence of such Change of Control.

 

(ii) If the Employee’s employment is terminated as a result of a Qualifying Termination which occurs upon or within 24 months following a Change of Control, the Restricted Stock Units shall become fully vested and non-forfeitable on the date of the Qualifying Termination (to the extent that it is not already vested).

 

(b) Other Actions.  In the event of a Change of Control, the Committee may make such adjustments and take such other actions with respect to outstanding Restricted Stock Units  as the Committee deems appropriate pursuant to Section 10(c) of the Plan.

 

(c) Definitions of Certain Terms.  For purposes of this Agreement, the following definitions shall apply:

 

(i) “Beneficial Owner,” “Beneficially Owns,” and “Beneficial Ownership” shall have the meanings ascribed to such terms for purposes of Section 13(d) of the Exchange Act and the rules thereunder, except that, for purposes of this Section 5, “Beneficial Ownership” (and the related terms) shall include Voting Securities that a Person has the right to acquire pursuant to any agreement, or upon exercise of conversion rights, warrants, options, or otherwise, regardless of whether any such right is exercisable within 60 days of the date as of which Beneficial Ownership is to be determined.

 

(ii) “Change of Control” means and shall be deemed to have occurred if

 

(1) any Person, other than the Company or a Related Party, acquires directly or indirectly the Beneficial Ownership of any Voting Security of the Company and immediately after such acquisition such Person has, directly or indirectly, the Beneficial Ownership of Voting Securities representing 50 percent or more of the total voting power of all the then-outstanding Voting Securities; or

 

(2) those individuals who as of Grant Date constitute the Board or who thereafter are elected to the Board and whose election, or nomination for election, to the Board was approved by a vote of at least two-thirds of the directors then still in office who either were directors as of Grant Date or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority of the members of the Board; or

 

(3) there is consummated a merger, consolidation, recapitalization or reorganization of the Company, a reverse stock split of outstanding Voting Securities, or an acquisition of securities or assets by the Company (a “Transaction”), other than a Transaction

 

 

  

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which would result in the holders of Voting Securities having at least 80 percent of the total voting power represented by the Voting Securities outstanding immediately prior thereto continuing to hold Voting Securities or voting securities of the surviving entity having at least 60 percent of the total voting power represented by the Voting Securities or the voting securities of such surviving entity outstanding immediately after such Transaction and in or as a result of which the voting rights of each Voting Security relative to the voting rights of all other Voting Securities are not altered; or

 

(iii) there is implemented or consummated a plan of complete liquidation of the Company or sale or disposition by the Company of all or substantially all of the Company’s assets other than any such transaction which would result in Related Parties owning or acquiring more than 50 percent of the assets owned by the Company immediately prior to the transaction.

 

“Good Reason” shall mean, without the Employee’s express written consent, the occurrence of any one or more of the following:

 

(1) A material diminution of the Employee’s authorities, duties or responsibilities as an employee of the Company;

 

(2) A material change in the geographic location at which the Employee must perform services; for purposes of this Agreement, a material change means the Company requires the Employee to be based at a location which is at least 50 miles farther from the Employee’s then current primary residence than is the Employee’s then current office location;

 

(3) A material diminution by the Company in the Employee’s base salary as in effect on the Grant Date or as the same shall be increased from time to time; or

 

(4) A material breach by the Company of this Agreement or any written severance agreement in effect between the Employee and the Company.

 

Notwithstanding the foregoing, the Employee shall not have Good Reason for termination if, within 60 days after the date on which the Employee gives a Notice of Termination, the Company corrects the action or failure to act that constitutes the grounds for termination for Good Reason as set forth in the Employee’s Notice of Termination.  If the Company does not correct the action or failure to act, the Employee must terminate his or her employment within 30 days after the end of the cure period, in order for the termination to be considered a Good Reason termination.  The existence of Good Reason shall not be affected by the Employee’s temporary incapacity due to physical or mental illness not constituting a Permanent Disability.

 

(iv) “Notice of Termination” means a written notice which (1) shall indicate the specific termination provision in this Agreement relied upon, and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Employee’s employment under the provision so indicated, and (2) shall be provided by the Employee within 30 days after the event giving rise to the termination of employment by the Employee for Good Reason.

 

 

  

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(v) “Qualifying Termination” means the occurrence of any one or more of the following events (as evidenced by a Notice of Termination):

 

(1) A termination of the Employee’s employment by the Company for reasons other than Cause, as evidenced by a Notice of Termination delivered by the Company to the Employee; or

 

(2) A termination by the Employee for Good Reason, as evidenced by a Notice of Termination delivered by the Employee to the Company.

 

(vi) “Person” shall have the meaning ascribed for purposes of Section 13(d) of the Exchange Act and the rules thereunder.

 

(vii) “Related Party” means (a) a majority-owned subsidiary of the Company; or (b) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any majority-owned subsidiary of the Company; or (c) a corporation owned directly or indirectly by the shareholders of the Company in substantially the same proportion as their ownership of Voting Securities; or (d) if, prior to any acquisition of a Voting Security which would result in any Person Beneficially Owning more than ten percent of any outstanding class of Voting Security and which would be required to be reported on a Schedule 13D or an amendment thereto, the Board approved the initial transaction giving rise to an increase in Beneficial Ownership in excess of ten percent and any subsequent transaction giving rise to any further increase in Beneficial Ownership; provided, however, that such Person has not, prior to obtaining Board approval of any such transaction, publicly announced an intention to take actions which, if consummated or successful (at a time such Person has not been deemed a “Related Party”), would constitute a Change of Control.

 

(viii) “Voting Securities” means any securities of the Company which carry the right to vote generally in the election of directors.

 

	
6.  

	
Settlement.

 

(a) Time of Settlement.  Settlement of Restricted Stock Units shall occur within 60 days following the date on which the Restricted Period lapses; provided, however, that (i) if Employee made a timely election to defer payment under the Deferred Compensation Plan, the settlement of the Restricted Stock Units will be made on the applicable date specified for payment in accordance with the Restricted Stock Units Election that was filed by Employee under the Deferred Compensation Plan; (ii) settlement shall be delayed to the extent specified in and in accordance with Section 7, and (iii), in the case of any tranche of Restricted Stock Units as to which Employee has become eligible for Retirement before the fixed vesting date (i.e., the stated vesting date applicable to such tranche), such RSUs will be settled within ten days rather than within 60 days (assuming clauses (i) and (ii) do not apply).  The Company shall settle the Restricted Stock Units by delivering Shares to Employee equal to the number of Restricted Stock Units that are payable on the settlement date.  The Company may make delivery of Shares in settlement of Restricted Stock Units by either delivering one or more certificates representing

 

 

  

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such Shares to the Employee, registered in the name of the Employee (and any joint name, if so directed by the Employee), or by depositing such Shares into a stock brokerage account maintained for the Employee (or of which the Employee is a joint owner, with the consent of the Employee).  If the Company determines to settle Restricted Stock Units by making a deposit of Shares into such an account, the Company may settle any fractional Restricted Stock Unit by means of such deposit.  In other circumstances or if so determined by the Company, the Company shall instead pay cash in lieu of fractional Shares, on such basis as the Committee or the Board may determine.  In no event will the Company issue fractional Shares.

 

(b) Effect of Settlement.  Upon settlement of Restricted Stock Units, all obligations of the Company in respect of such Restricted Stock Units shall be terminated.

 

     7. Compliance with Section 409A.

 

(a) General.  Other provisions of this Agreement notwithstanding, the provisions of this Section 7 will apply in order that the RSUs will comply with Section 409A.  RSUs will be deemed separate payments under Code Section 409A as provided in Section 7(c)(vi).  The requirements of Code Section 409A and regulations thereunder shall apply to the extent necessary so that Employee is not subject to constructive receipt of income under Code Section 409A prior to the actual distribution of Shares in settlement of RSUs hereunder or to tax penalties under Code Section 409A.  Other restrictions and limitations under the Deferred Compensation Plan with respect to distributions apply to electively deferred RSUs subject to Code Section 409A, and if those provisions apply and are compliant with Code Section 409A, they shall take precedence over inconsistent provisions of this Section 7.

 

(b) Restrictions on 409A RSUs.  In the case of any RSUs that constitute a "deferral of compensation" under Code Section 409A ("409A RSUs"), the following restrictions will apply:

(i)           Separation from Service.  Any distribution in settlement of the 409A RSUs that is triggered by a termination of employment hereunder will occur only at such time as Employee has had a “separation from service” within the meaning of Treasury Regulation § 1.409A-1(h), regardless of whether any other event might be viewed as a termination of employment by the Company for any other purpose.

(ii)           Six-Month Delay Rule. The "six-month delay rule" will apply to 409A RSUs if these four conditions are met:

	
  

	
(A)  

	
Employee has a separation from service (within the meaning of Treasury Regulation § 1.409A-1(h)).

	
  

	
(B)

	
A distribution of shares is triggered by the separation from service (but not due to death).

	
  

	
(C)

	
Employee is a “specified employee” under Section 409A.

 

  

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If it applies, the six-month delay rule will delay a distribution in settlement of 409A RSUs triggered by separation from service where the distribution otherwise would be within six months after the separation from service, subject to the following:

	
  

	
(D)  

	
Any delayed payment shall be made on the date six months after separation from service.

	
  

	
(E)

	
During the six-month delay period, accelerated distribution will be permitted in the event of Employee’s death and for no other reason (including no acceleration upon a Change of Control) except to the extent permitted under Section 409A.

	
  

	
(F)

	
Any payment that is not triggered by a separation from service, or is triggered by a separation from service but would be made more than six months after separation (without applying this six-month delay rule), shall be unaffected by the six-month delay rule.

(iii)           Change of Control Rule.  Any distribution of 409A RSUs triggered by a Change of Control will be made only if, in connection with the Change of Control, there occurs a change in the ownership of the Company, a change in effective control of the Company, or a change in the ownership of a substantial portion of the assets of the Company as defined in Treasury Regulation § 1.409A-3(i)(5).

	
  

	
(A)

	
If any distribution is delayed by operation of this Change of Control rule, the distribution shall be made at the earliest permissible time or event thereafter that could trigger a distribution under Code Section 409A (subject to the six-month delay rule if applicable).

	
  

	
(B)

	
No accelerated distribution upon a Change of Control (even if otherwise permitted under this Change of Control rule) applies to a distribution delayed by application of the six-month delay rule.

  (c)           Other Compliance Provisions.  The following provisions apply to Restricted Stock Units (including, if so specified, non-409A RSUs):

	
  

	
(i)

	
The settlement of 409A RSUs may not be accelerated by the Company except to the extent permitted under Section 409A.

	
  

	
(ii)

	
If Employee is entitled under any agreement with the Company to accelerated vesting of non-409A RSUs upon a Termination for "Good Reason," it is understood that such Good Reason will be limited to circumstances that qualify under Treasury Regulation § 1.409A-1(n)(2), and any amendment to such other agreement to so qualify such definition of Good Reason shall apply to the non-409A RSUs hereunder.

	
  

	
(iii)

	
Any election to defer settlement of RSUs must comply with the election timing rules under the Deferred Compensation Plan and with election timing rules under Section 409A.

 

  

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(iv)

	
Any restriction imposed on 409A RSUs hereunder or under the terms of other documents solely to ensure compliance with Section 409A shall not be applied to an RSU that is not a 409A RSU except to the extent necessary to preserve the status of such RSU as not being a "deferral of compensation" under Section 409A.

	
  

	
(v)

	
If any mandatory term required for 409A RSUs or non-409A RSUs to avoid tax penalties under Section 409A is not otherwise explicitly provided under this document or other applicable documents, such term is hereby incorporated by reference and fully applicable as though set forth at length herein.

	
  

	
(vi)

	
Each tranche of RSUs shall be deemed a separate payment for purposes of Section 409A.  In addition, any pro rata portion of a given tranche of RSUs under any pro rationing rule set forth in this Agreement, calculated from the stated vesting date of the previously vesting tranche (or grant date, in the case of the first tranche) until December 31, or calculated for that tranche for the period from January 1 until the end of the Company's then current fiscal year, or calculated for that tranche for the period from the beginning of the fiscal year until the next stated vesting date (or anniversary of grant if there is no vesting in that year), shall be deemed a separate payment for purposes of Section 409A.

     8. Tax Withholding.

 

The Company will withhold from the number of Shares to be delivered upon settlement a number of whole shares which has a Fair Market Value equal to the mandatory federal, state and local tax withholding obligation relating to such settlement.  The Shares withheld will be valued at the Fair Market Value determined in accordance with procedures for valuing Shares as determined by the Committee and otherwise in effect at the time of settlement, including under the Deferred Compensation Plan.

 

     9.Miscellaneous.

 

This Agreement shall be binding upon the heirs, executors, administrators, and successors of the parties.  This Agreement constitutes the entire agreement between the parties with respect to the Restricted Stock Units granted hereby, and supersedes any prior agreements or documents with respect to such Restricted Stock Units.  No amendment, alteration, suspension, discontinuation, or termination of this Agreement which may impose any additional obligation upon the Company or materially impair the rights of Employee with respect to the Restricted Stock Units shall be valid unless in each instance such amendment, alteration, suspension, discontinuation, or termination is expressed in a written instrument duly executed in the name and on behalf of the Company and, if such amendment materially impairs the rights of Employee, by Employee.

 

By accepting this grant of Restricted Stock Units, Employee agrees to the terms of this Agreement and agrees to be bound by all the terms and provisions of the Agreement, the Plan (as presently in effect or hereafter amended), and the Deferred Compensation Plan, and by all decisions and determinations of the Committee and the Administrator.

 

  

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CHARMING SHOPPES, INC.

	  
	
BY:__________________________________

	
Colin D. Stern – Executive Vice President

	  
	
EMPLOYEE:

	  
	
_____________________________________

 

  

12Exhibit 10.26

Exhibit
10.26

___________ __, 20__

[Name of Recipient]

[Address]

Notice of Grant of Restricted Stock Units

Dear [Name]:

Congratulations! You have been granted a Restricted Stock Unit award (the “Award”) pursuant
to the terms and conditions of the attached Verint Systems Inc. (the “Company”) Restricted Stock
Unit Award Agreement (the “Agreement”). The details of your Award are specified below and in the
attached Agreement.

	 	 	 
	Granted To:

	 	[Name]
	ID#:

	 	[ID Number]
	 
	 	 
	Grant Date:

	 	[Date]
	 
	 	 
	Units Granted:

	 	[Number]
	 
	 	 
	Price Per Unit:

	 	U.S.$0.00
	 
	 	 
	Vesting Schedule:

	 	Except as provided below, the Restricted Stock Units
granted hereby shall vest on each of the following dates
(each, a “Vesting Date”):
	 
	 	 
	 

	 	(a) 1/3 on April 4, 2011;
	 

	 	(b) 1/3 on April 4, 2012; and
	 

	 	(c) 1/3 on April 4, 2013.
	 
	 	 
	 

	 	Notwithstanding the foregoing vesting schedule, if the
following event (the “Vesting Event”) has not occurred on
the applicable Vesting Date, the Restricted Stock Units
scheduled to vest on that date will not vest until such
event has occurred: the Company has sufficient available
capacity under one or more of its existing equity plans or
a new shareholder-approved equity incentive plan for all
equity awards approved on the date of this award, on May
20, 2009, on March 4, 2009, and on May 28, 2008, in each
case, which remain outstanding at such time, to vest in
compliance with the Nasdaq restriction which provides that
only legacy Witness
employees and new Company hires since May 25, 2007 may
receive awards under the Witness Systems, Inc. Amended &
Restated Stock Incentive Plan assumed by the Company in
connection with the merger with Witness.

 

 

 

	 	 	 
	Cash Cancel Option:

	 	Notwithstanding the foregoing vesting provisions, in the
event your Award does not vest on a Vesting Date because
the Vesting Event has not occurred at such time, the
Company shall have the right, in its sole and absolute
discretion, on such Vesting Date or at any time thereafter
(until the occurrence of the Vesting Event), to cancel the
portion of your Award that would have vested on such
Vesting Date and to cause the Verint entity which employs
you to pay you in cash (in accordance with its normal
payroll practices) the Fair Market Value (as defined in
the Agreement) of one share of Common Stock for each
Restricted Stock Unit being cancelled.
	 
	 	 
	Restrictions on
 Re-Sale:

	 	Regardless of the vesting of your Award, in no event shall
you be allowed to re-sell the shares underlying this grant
of Restricted Stock Units until the Company has an
effective registration statement under the Securities Act
of 1933, as amended, relating to the shares desired to be
sold.
	 
	 	 
	Termination Date:
	 	Notwithstanding any other provision of this Notice of
Grant or of the related Restricted Stock Unit Award
Agreement, if Restricted Stock Units have not vested by
the tenth anniversary of the Grant Date, such Restricted
Stock Units shall be forfeited by Grantee as of such date.

	 	 	 	 	 
	 	Verint Systems Inc.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

 

2

 

	 	 	 	 	 

By my signature below, I hereby acknowledge my receipt of this Award granted on the date shown
above, which has been issued to me under the terms and conditions of the Agreement. I further
acknowledge receipt of a copy of the Agreement and a summary information sheet. I agree that the
Award is subject to all of the terms and conditions of this Notice of Grant of Restricted Stock
Units and the Agreement (including any equity plan referred to therein).

If I am a resident of Canada, I also acknowledge having requested that this Notice and all
documents referred to herein be drafted in the English language. Je reconnais également avoir
exigé que ce document ainsi que tout document auquel ce document fait référence, soient rédigés en
langue anglaise.

	 	 	 	 	 	 	 	 	 	 	 
	Signature:

	 	 	 	 	 	Date:	 	 	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 

 

3

 

VERINT SYSTEMS INC.

RESTRICTED STOCK UNIT AWARD AGREEMENT

This Restricted Stock Unit Award Agreement (“Agreement”) governs the terms and conditions
of the Restricted Stock Unit Award (the “Award”) specified in the Notice of Grant of
Restricted Stock Units (the “Notice of Grant”) delivered herewith entitling the person to
whom the Notice of Grant is addressed (“Grantee”) to receive from Verint Systems Inc. (the
“Company”) the number of restricted stock units indicated in the Notice of Grant (the
“Restricted Stock Units”).

	1	 	RESTRICTED STOCK UNITS; VESTING
	 
	1.1	 	Grant of Restricted Stock Units.
	 
	(a)	 	The Award of the Restricted Stock Units is made subject to the terms and conditions of this
Agreement and the Notice of Grant. If and when the Restricted Stock Units vest in accordance
with the terms of this Agreement and the Notice of Grant without forfeiture, and upon the
satisfaction of all other applicable conditions as to the Restricted Stock Units, one share of
Common Stock of the Company shall be issuable to Grantee for each Restricted Stock Unit that
vests on such date (the “Shares”), which Shares, except as otherwise provided herein
or in the Notice of Grant, will be free of any Company-imposed transfer restrictions. Any
fractional Restricted Stock Unit remaining after the Award is fully vested shall be discarded
and shall not be converted into a fractional Share.
	 
	1.2	 	Restrictions.
	 
	(a)	 	Except as provided herein, Grantee shall not have any right in, to or with respect to, any of
the Shares (including any voting rights or rights with respect to dividends paid on the
Company’s Common Stock) issuable under the Award unless and until the Award is settled by the
issuance of such Shares to Grantee, whereupon the Grantee shall have all the rights of a
shareholder with respect to such Shares.
	 
	(b)	 	The Restricted Stock Units may not be transferred in any manner other than by will or by the
laws of descent and distribution. Any attempt to dispose of Restricted Stock Units or any
interest in the same in a manner contrary to the restrictions set forth in this Agreement
shall be void and of no effect.
	 
	(c)	 	In no event shall Grantee be allowed to re-sell the Shares underlying this grant of
Restricted Stock Units until the Company has an effective registration statement under the
Securities Act of 1933, as amended (the “Securities Act”), relating to the shares
desired to be sold.

 

4

 

	1.3	 	Vesting.
	 
	(a)	 	Subject to the terms and conditions of this Agreement, the applicable percentage (per the
Notice of Grant) of Restricted Stock Units awarded hereunder (the “Vested Percentage”)
shall be deemed vested and no longer subject to forfeiture under this Agreement on the latest
of:

	 	(i)	 	the applicable vesting date (“Vesting Date”) in accordance with the
schedule set forth in the Notice of Grant, and
	 
	 	(ii)	 	the date the Company has sufficient available capacity under one or more of
its existing equity plans or a new shareholder-approved equity incentive plan for all
equity awards approved on the date of this award, on May 20, 2009, on March 4, 2009,
and on May 28, 2008, in each case, which remain outstanding at such time, to vest in
compliance with the Nasdaq restriction which provides that only legacy Witness
employees and new Company hires since May 25, 2007 may receive awards under the
Witness Systems, Inc. Amended & Restated Stock Incentive Plan assumed by the Company
in connection with the merger with Witness (the “Vesting Event”).

Vesting shall cease upon the date Grantee’s Continuous Service terminates for any reason,
unless otherwise determined by the Board of Directors of the Company (the “Board”)
or a committee thereof designated to administer the Award (the “Committee”) in its
sole discretion.

	(b)	 	Notwithstanding the foregoing vesting provisions, in the event the Award does not vest on a
Vesting Date because the Vesting Event has not occurred at such time, the Company shall have
the right, in its sole and absolute discretion, on such Vesting Date or at any time thereafter
(until the occurrence of the Vesting Event), to cancel the portion of the Award that would
have vested on such Vesting Date and to pay Grantee in cash the Fair Market Value of one share
of Common Stock for each Restricted Stock Unit being cancelled. All cash payments to the
Grantee hereunder will be made by the Verint entity which employs the Grantee in accordance
with its normal payroll practices either on or promptly following the date of the Company
action which gives rise to such payment; provided, however, that the Company
shall have the authority to delay any such payments to the extent necessary to comply with
Section 409A(a)(2)(B)(i) of the Code (relating to payments made to “specified employees”); in
such event, any payment to which the Grantee would otherwise be entitled during the six (6)
month period following the date the Grantee ceases to be employed by or otherwise in the
service of the Company will be issued on the first business day following the expiration of
such six (6) month period.

 

5

 

	(c)	 	Upon the occurrence of a Change in Control (other than a Hostile Change in Control), the
Committee may, in its sole discretion, elect to accelerate the vesting of all unvested
Restricted Stock Units. In the event of a Hostile Change in
Control, such accelerated vesting
shall occur automatically upon the
occurrence of such Hostile Change in
Control. At any time before a
Change in Control, the Committee
may, without the consent of the
Grantee (i) require the entity
effecting the Change in Control or a
parent or subsidiary of such entity
to assume this Award or substitute
an equivalent cash award therefor or
(ii) terminate and cancel all
outstanding Restricted Stock Units
upon the Change in Control. In
connection with any such termination
and cancellation of outstanding
Restricted Stock Units upon a Change
in Control, the Committee may, in
its discretion, cause the payment to
the Grantee for each unvested
Restricted Stock Unit equal to the
fair market value of the Common
Stock on the date of the Change in
Control calculated as provided in
the definition of Fair Market Value
on Appendix A hereto, but based
solely on the value of the Common
Stock on the date of determination
and not based on a 30 day average
trading price. For the purposes of
this Section, Restricted Stock Units
under this Award shall be considered
assumed if, following the closing of
the Change in Control transaction,
each Restricted Stock Unit confers
the right to receive cash in an
amount equal to the consideration
(if such consideration was cash) or
the fair market value of the
consideration (if such consideration
was stock, other securities, or
property) received in such
transaction by holders of Common
Stock for each share of Common Stock
held on the effective date of the
transaction (and if holders were
offered a choice of consideration,
the type of consideration chosen by
the holders of a majority of the
outstanding shares of Common Stock).
	 
	1.4	 	Forfeiture.

	(a)	 	If Grantee’s Continuous Service terminates for any reason, all Restricted Stock Units which
are then unvested shall, unless otherwise determined by the Committee in its sole discretion,
be cancelled and the Company shall thereupon have no further obligation thereunder. For the
avoidance of doubt, subject to a separate written agreement between the parties, Grantee
acknowledges and agrees that he or she has no expectation that any Restricted Stock Units will
vest on the termination of his or her Continuous Service for any reason and that he or she
will not be entitled to make a claim for any loss occasioned by such forfeiture as part of any
claim for breach of his or her employment or service contract or otherwise.
	 
	(b)	 	A Grantee’s Continuous Service shall not be considered interrupted in the case of (i)
transfers within the Company, its Subsidiaries, or Affiliates, or any successor thereto, or
(ii) any change in status from employee, director, or consultant (to any other such status) so
long as the provision of services to the Company, a Subsidiary, or Affiliate is not
interrupted or terminated.

 

6

 

	(c)	 	A Grantee’s Continuous Service shall not be considered interrupted in the case of any
approved leave of absence. An approved leave of absence shall include sick leave, military
leave, or any other leave that is required by statute or promised by contract, by Company
policy, or by other authorization of the Company. Any other leave of absence will be
considered unauthorized and Grantee’s Continuous
Service will be considered terminated for purposes of this Agreement at the start of such
unauthorized leave. Notwithstanding the foregoing, unless Grantee’s right to return from
an authorized leave is guaranteed by statute or by contract, if an approved leave of
absence exceeds six (6) months, Grantee’s Continuous Service shall be considered terminated
for purposes of this Agreement on the date such authorized leave exceeds six (6) months in
duration; provided, however, that the Committee shall have discretion to
waive the effect of the foregoing forfeiture provision or lengthen the six month period
before a forfeiture occurs to the extent necessary to comply with applicable tax, labor, or
other law or based on the particular facts and circumstances of the leave in question.
	 
	(d)	 	Notwithstanding any other provision of the Notice of Grant or of this Agreement, if
Restricted Stock Units have not vested by the tenth anniversary of the grant date, such
Restricted Stock Units shall be forfeited by Grantee as of such date. In the event of any
such forfeiture, all such forfeited Restricted Stock Units shall be cancelled.

	1.5	 	Delivery.

	(a)	 	Subject to Section 1.6 and any other applicable conditions hereunder, as soon as
administratively practicable following the vesting of Restricted Stock Units in accordance
with the terms of this Agreement (but in no event later than the date the short-term deferral
period under Section 409A of the Code expires with respect to such vested Shares), the Company
shall issue the applicable Shares and, at its option, (i) deliver or cause to be delivered to
Grantee a certificate or certificates for the applicable Shares or (ii) transfer or arrange to
have transferred the Shares to a brokerage account of Grantee designated by the Company.

	(b)	 	Notwithstanding the foregoing, the issuance of Shares upon the vesting of a Restricted Stock
Unit shall be delayed in the event the Company reasonably anticipates that the issuance of
Shares would constitute a violation of federal securities laws, other applicable law, or
Nasdaq rules. If the issuance of the Shares is delayed by the provisions of this paragraph,
such issuance shall occur at the earliest date at which the Company reasonably anticipates
issuing the Shares will not cause such a violation. For purposes of this paragraph, the
issuance of Shares that would cause inclusion in gross income or the application of any
penalty provision or other provision of the Code or other tax code applicable to Grantee is
not considered a violation of applicable law.
	 
	1.6	 	Tax; Withholding.

	(a)	 	The Company shall determine the amount of any withholding or other tax required by law to be
withheld or paid by the Company or its Subsidiary with respect to any income recognized by
Grantee with respect to the Restricted Stock Units or the issuance of Shares pursuant to the
terms of the Restricted Stock Units.

 

7

 

	(b)	 	Neither the Company nor any Subsidiary, Affiliate or agent makes any representation or
undertaking regarding the treatment of any tax or withholding in connection with the grant or
vesting of the Award or the subsequent sale of Shares subject to the Award. The Company and
its Subsidiaries and Affiliates do not commit and are under no obligation to structure the
Award to reduce or eliminate Grantee’s tax liability.

	(c)	 	Grantee shall be required to meet any applicable tax withholding obligation, whether United
States federal, state, local or non-U.S., including any employment tax obligations or social
security obligations (the “Tax Withholding Obligation”), prior to any event in
connection with the Award (e.g., vesting, delivery...etc.) that the Company determines may
result in any Tax Withholding Obligation, and the Company reserves the right to determine the
method or methods by which such Tax Withholding Obligations will be satisfied, together with
any associated timing or other details required to effectuate such method or methods. The
Company or its Subsidiary or Affiliate shall withhold from any cash payable to the Grantee in
connection with this Award an amount sufficient to satisfy the minimum applicable tax
withholding obligation, whether United States federal, state, local or non-U.S., including any
employment tax obligations or social security obligations.
	 
	(d)	 	Notwithstanding Section 1.6(c):

	 	(i)	 	If in the tax jurisdiction in which Grantee resides a Tax Withholding
Obligation arises upon vesting of the Award (regardless of when the Shares underlying
the Award are delivered to Grantee), then on each date the Award actually vests, if
(1) the Company does not have in place an effective registration statement under the
Securities Act under which Grantee may sell Shares or (2) Grantee is subject to a
Company-imposed trading blackout, unless Grantee has made other arrangements
satisfactory to the Company, the Company will withhold from the Shares to be delivered
to Grantee such number of Shares as are sufficient in value (as determined by the
Committee in its sole discretion) to cover the minimum amount of the Tax Withholding
Obligation.

	 	(ii)	 	If in the tax jurisdiction in which Grantee resides a Tax Withholding
Obligation arises upon delivery of the Shares underlying the Restricted Stock Units
(regardless of when vesting occurs), then following each date the Award actually
vests, the Company will defer the delivery of the Shares otherwise deliverable to
Grantee until the earliest of (1) the date Grantee’s employment with the Company (or a
Subsidiary or Affiliate) is terminated (by either party), (2) the date that the
short-term deferral period under Section 409A of the Code expires with respect to such
vested Shares, or (3) the date on which the Company has in place an effective
registration statement under the Securities Act under which Grantee may sell Shares
and on which Grantee is not subject to a Company-imposed
trading blackout (the earliest of such dates, the “Delivery Date”). If on
the Delivery Date (1) the Company does not have in place an effective registration
statement under the Securities Act under which Grantee may sell Shares or (2)
Grantee is subject to a Company-imposed trading blackout, unless Grantee has made
other arrangements satisfactory to the Company, the Company will withhold from the
Shares to be delivered to Grantee such number of Shares as are sufficient in value
(as determined by the Committee in its sole discretion) to cover the minimum amount
of the Tax Withholding Obligation.

 

8

 

	(e)	 	Grantee is ultimately liable and responsible for all taxes owed by Grantee in connection with
the Award, regardless of any action the Company or any of its Subsidiaries, Affiliates or
agents takes with respect to any tax withholding obligations that arise in connection with the
Award. Accordingly, Grantee agrees to pay to the Company or its relevant Subsidiary or
Affiliate as soon as practicable, including through additional payroll withholding (if
permitted under applicable law), any amount of required tax withholding that is not satisfied
by any such action of the Company or its Subsidiary or Affiliate.

	(f)	 	The Committee shall be authorized, in its sole discretion, to establish such rules and
procedures relating to the use of shares of Common Stock to satisfy tax withholding
obligations as it deems necessary or appropriate to facilitate and promote the conformity of
Grantee’s transactions under this Agreement with Rule 16b-3 under the Securities Exchange Act
of 1934, as amended, if such rule is applicable to transactions by Grantee.

	2	 	CERTAIN DEFINITIONS

Defined terms used herein and not otherwise defined in the body of this Agreement are defined in
Appendix A hereto.

	3	 	REPRESENTATIONS OF GRANTEE

Grantee hereby represents to the Company that Grantee has read and fully understands the provisions
of this Agreement, and Grantee acknowledges that Grantee is relying solely on his or her own
advisors with respect to the tax consequences of this Award. Grantee acknowledges that this
Agreement has not been reviewed or approved by any regulatory authority in his or her country of
residence or otherwise.

 

9

 

	4	 	NOTICES

All notices or communications under this Agreement shall be in writing, addressed as follows:

To the Company:

Verint Systems Inc.

330 South Service Road

Melville, NY 11747-3201

U.S.A.

+(631) 962-9600 (phone)

+(631) 962-9623 (fax)

Attn: Chief Legal Officer

To Grantee:

as set forth in the Company’s payroll records

Any such notice or communication shall be (a) delivered by hand (with written confirmation of
receipt) or sent by a nationally recognized overnight delivery service (receipt requested) or (b)
sent certified or registered mail, return receipt requested, postage prepaid, addressed as above
(or to such other address as such party may designate in writing from time to time), and the actual
date of receipt shall determine the time at which notice was given. Grantee will promptly notify
the Company in writing upon any change in Grantee’s address.

	5	 	ASSIGNMENT; BINDING AGREEMENT

This Agreement shall be binding upon and inure to the benefit of the heirs and representatives of
Grantee and the assigns and successors of the Company, but neither this Agreement nor any rights
hereunder shall be assignable or otherwise subject to hypothecation by Grantee.

	6	 	ENTIRE AGREEMENT; AMENDMENT

This Agreement and the Notice of Grant represent the entire agreement of the parties with respect
to the subject matter hereof, except that the Committee reserves the right, in its sole discretion,
to make the Award and this Agreement subject to the terms of an equity incentive plan of the
Company so long as the terms of such equity incentive plan do not contradict any of the provisions
of the Agreement or the Notice of Grant in any material respect. This Agreement or the Notice of
Grant may be amended by the Committee without the consent of Grantee except in the case of an
amendment adverse to Grantee, in which case Grantee’s consent shall be required. Notwithstanding
the foregoing, however, the Committee shall have the power to adopt regulations for carrying out
this Agreement
and to make changes in such regulations, as it shall, from time to time, deem advisable. In
addition, any interpretation by the Committee of the terms and provisions of this Agreement and the
administration thereof, and all action taken by the Committee, shall be final and binding.

 

10

 

	7	 	GOVERNING LAW

This Agreement shall be governed by the laws of the state of New York, without giving effect to any
principle of law that would result in the application of the law of any other jurisdiction. Each
party to this Agreement hereby consents and submits himself, herself or itself to the jurisdiction
of the courts of the state of New York for the purposes of any legal action or proceeding arising
out of this Agreement. Nothing in this Agreement shall affect the right of the Company to commence
proceedings against the Grantee in any other competent jurisdiction, or concurrently in more than
one jurisdiction, or to serve process, pleadings and other papers upon the Grantee in any manner
authorized by the laws of any such jurisdiction. The Grantee irrevocably waives:

(a) any objection which it may have now or in the future to the laying of the venue of any
action, suit or proceeding in any court referred to in this Section; and

(b) any claim that any such action, suit or proceeding has been brought in an inconvenient
forum.

	8	 	SEVERABILITY

Whenever possible, each provision in this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Agreement shall be held to
be prohibited by or invalid under applicable law, then (a) such provision shall be deemed amended
to accomplish the objectives of the provision as originally written to the fullest extent permitted
by law and (b) all other provisions of this Agreement shall remain in full force and effect.

	9	 	ONE-TIME GRANT; NO RIGHT TO CONTINUED SERVICE OR PARTICIPATION; EFFECT ON OTHER PLANS

The award evidenced by this Agreement is a voluntary, discretionary bonus being made on a one-time
basis and it does not constitute a commitment to make any future awards. Neither this Agreement
nor the Notice of Grant shall confer upon Grantee any right with respect to continued service with
the Company, a Subsidiary, or an Affiliate, nor shall it interfere in any way with the right of the
Company, a Subsidiary, or an Affiliate to terminate Grantee’s Continuous Service at any time.
Payments received by Grantee pursuant to this Agreement and the Notice of Grant shall not be
considered salary or other compensation for purposes of any severance pay or similar allowance and
shall not be included in the determination of benefits under any pension, group insurance, or other
benefit plan of the Company or any Subsidiaries or Affiliate in which Grantee may be enrolled or
for which Grantee may become eligible, except as otherwise required by law,
as may be provided under the terms of such plans, or as determined by the Board of Directors of the
Company.

 

11

 

	10	 	NO STRICT CONSTRUCTION

No rule of strict construction shall be implied against the Company, the Committee or any other
person in the interpretation of any of the terms of this Agreement, the Notice of Grant or any rule
or procedure established by the Committee.

	11	 	USE OF THE WORD “GRANTEE”

Wherever the word “Grantee” is used in any provision of this Agreement under circumstances where
the provision should logically be construed to apply to the executors, the administrators, or the
person or persons to whom the Restricted Stock Units may be transferred by will or the laws of
descent and distribution, the word “Grantee” shall be deemed to include such person or persons.

	12	 	FURTHER ASSURANCES

Grantee agrees, upon demand of the Company or the Committee, to do all acts and execute, deliver
and perform all additional documents, instruments and agreements which may be reasonably required
by the Company or the Committee, as the case may be, to implement the provisions and purposes of
this Agreement.

	13	 	AMENDMENT TO MEET THE REQUIREMENTS OF SECTION 409A ET AL

Grantee acknowledges that the Company, in the exercise of its sole discretion and without the
consent of Grantee, may amend or modify this Agreement in any manner and delay the payment of any
amounts payable pursuant to this Agreement to the minimum extent necessary to meet the requirements
of Section 409A of the Code as amplified by any Internal Revenue Service or U.S. Treasury
Department regulations or guidance, or any other applicable equivalent tax law, rule, or
regulation, as the Company deems appropriate or advisable.

 

12

 

	14	 	ADJUSTMENTS UPON CHANGES IN CAPITALIZATION

In the event of a reorganization, recapitalization, stock split, spin-off, split-off, split-up,
stock dividend, issuance of stock rights, combination of shares, merger, consolidation or any other
change in the corporate structure of the Company affecting the Company’s Common Stock, or any
distribution to stockholders other than a regular cash dividend, the Board shall make appropriate
adjustment in the number and kind of shares to which the Restricted Stock Units relate and any
other adjustments to the Award as it determines appropriate. No fractional Restricted Stock Units
shall be awarded pursuant to such an adjustment.

	15	 	CONSENT TO TRANSFER PERSONAL DATA

The Company and its Subsidiaries hold certain personal information about Grantee, that may include
Grantee’s name, home address and telephone number, date of birth, social security number or other
employee identification number, salary, nationality, job title, any shares of stock held in the
Company, or details of any entitlement to shares of stock awarded, canceled, purchased, vested, or
unvested, for the purpose of implementing, managing, and administering the Award or the Agreement
(“Data”). The Grantee hereby agrees that the Company and/or its Subsidiaries may transfer
Data amongst themselves as necessary for the purpose of implementation, administration, and
management of Grantee’s participation in the Award or the Agreement, and the Company and/or any of
its Subsidiaries may each further transfer Data to any third parties assisting the Company in the
implementation, administration, and management of the Award or the Agreement. These recipients may
be located throughout the world, including outside the Grantee’s country of residence (or outside
of the European Union, for Grantees located within the European Union). Such countries may not
provide for a similar level of data protection as provided for by local law (such as, for example,
European privacy directive 95/46/EC and local implementations thereof). Grantee hereby authorizes
those recipients – even if they are located in a country outside of Grantee’s country of residence
(or outside of the European Union, for Grantees located within the European Union) – to receive,
possess, use, retain, and transfer the Data, in electronic or other form, for the purpose of
implementing, administering, and managing Grantee’s participation in the Award or the Agreement,
including any requisite transfer of such Data as may be required for the administration of the
Award or the Agreement and/or the subsequent holding of shares of stock on Grantee’s behalf by a
broker or other third party with whom Grantee or the Company may elect to deposit any shares of
stock acquired pursuant to the Award or the Agreement. Grantee is not obliged to consent to such
collection, use, processing and transfer of personal data and may, at any time, review Data,
require any necessary amendments to it, or withdraw the consent contained in this section by
contacting the Company in writing. However, withdrawing or withholding consent may affect
Grantee’s ability to participate in the Award or the Agreement. More information on the Data
and/or the consequences of withholding or withdrawing consent can be obtained from the Company’s
legal department.

 

13

 

	16	 	CERTAIN COUNTRY-SPECIFIC PROVISIONS

For residents of the UK only:

Grantee agrees, as a condition to its acceptance of the Award, to satisfy any requirement of the
Company or any Subsidiary that, prior to vesting of all or any part of the Award, Grantee enter
into a joint election under section 431(1) of the UK Income Tax (Earnings and Pensions) Act 2003,
the effect of which is that the Shares issued on vesting will be treated as if they were not
restricted securities.

Tax Withholding Obligations under this Agreement shall include, without limitation:

	 	(i)	 	United Kingdom (UK) income tax; and
	 
	 	(ii)	 	UK primary class 1 (employee’s) national insurance contributions.

For residents of Canada only:

I acknowledge having requested that this Agreement and all documents referred to herein be drafted
in the English language. Je reconnais également avoir exigé que ce document ainsi que tout
document auquel ce document fait référence, soient rédigés en langue anglaise.

For residents of Hong Kong only:

The Data Protection Principles specified in the Personal Data (Privacy) Ordinance (Cap. 486 of the
Laws of Hong Kong will apply to any Data upon its transfer to any place outside of Hong Kong).

END OF AGREEMENT

 

14

 

Appendix A

CERTAIN DEFINITIONS

For purposes of this Agreement, the following terms have the following meanings:

“1934 Act” means the Securities Exchange Act of 1934, as amended.

“Affiliate” means any entity other than the Subsidiaries in which the Company has a
substantial direct or indirect equity interest, as determined by the Board.

“Change in Control” means (i) the Board (or, if approval of the Board is not required as a
matter of law, the stockholders of the Company) shall approve (a) any consolidation or merger of
the Company in which the Company is not the continuing or surviving corporation or pursuant to
which shares of Common Stock would be converted into cash, securities or other property, other than
a merger of the Company in which the holders of Common Stock immediately prior to the merger have
the same proportionate ownership of common stock of the surviving corporation immediately after the
merger, or (b) any sale, lease, exchange or other transfer (in one transaction or a series of
related transactions) of all, or substantially all, the assets of the Company or (c) the adoption
of any plan or proposal for the liquidation or dissolution of the Company; (ii) any person (as such
term is defined in Section 13(d) of the 1934 Act), corporation or other entity other than the
Company shall make a tender offer or exchange offer to acquire any Common Stock (or securities
convertible into Common Stock) for cash, securities or any other consideration, provided that (a)
at least a portion of such securities sought pursuant to the offer in question is acquired and (b)
after consummation of such offer, the person, corporation or other entity in question is the
“beneficial owner” (as such term is defined in Rule 13d-3 under the 1934 Act), directly or
indirectly, of 20% or more of the outstanding shares of Common Stock (calculated as provided in
paragraph (d) of such Rule 13d-3 in the case of rights to acquire Common Stock); (iii) during any
period of two consecutive years, individuals who at the beginning of such period constituted the
entire Board ceased for any reason to constitute a majority thereof unless the election, or the
nomination for election by the Company’s stockholders, of each new director was approved by a vote
of at least two-thirds of the directors then still in office who were directors at the beginning of
the period; or (iv) the occurrence of any other event the Committee determines shall constitute a
“Change in Control” hereunder.

“Code” means the Internal Revenue Code of 1986, as amended.

“Common Stock” means the common stock of the Company, par value $.001 per share, or such
other class or kind of shares or other securities resulting from the application of Section 14 of
the Agreement.

 

15

 

“Continuous Service” means that the provision of services to the Company or a Subsidiary or
Affiliate in any capacity of employee, director or consultant is not interrupted or terminated. In
jurisdictions requiring notice in advance of an effective
termination as an employee, director or consultant, Continuous Service shall be deemed terminated
upon the actual cessation of providing services to the Company or a Subsidiary or Affiliate
notwithstanding any required notice period that must be fulfilled before a termination as an
employee, director or consultant can be effective under applicable labor laws. Continuous Service
shall not be considered interrupted in the case of (i) any approved leave of absence, (ii)
transfers among the Company, any Subsidiary or Affiliate, or any successor, in any capacity of
employee, director or consultant, or (iii) any change in status as long as the individual remains
in the service of the Company or a Subsidiary or Affiliate in any capacity of employee, director or
consultant. An approved leave of absence shall include sick leave, military leave, or any other
authorized personal leave.

“Fair Market Value” means, as of any date, the value of Common Stock determined as follows:

(a) If the Common Stock is listed on one or more established stock exchanges or national
market systems, including without limitation The Nasdaq Global Market, its Fair Market
Value shall be the average of the closing sales price for such stock (or the closing bid,
if no sales were reported) as quoted on the principal exchange or system on which the
Common Stock is listed (as determined by the Committee) over the 30 trading day period
ending on the date of determination (or, if no closing sales price or closing bid was
reported on that date, as applicable, on the last trading date such closing sales price or
closing bid was reported), as reported in The Wall Street Journal or such other source as
the Committee deems reliable;

(b) If the Common Stock is regularly quoted on an automated quotation system (including the
OTC Bulletin Board or Pink Sheets) or by a recognized securities dealer, its Fair Market
Value shall be the average of the closing sales price for such stock as quoted on such
system or by such securities dealer over the 30 trading day period ending on the date of
determination, or if no closing sales price was reported on that date, the closing sale
price on the immediately preceding trading date; or

(c) In the absence of an established market for the Common Stock of the type described in
(a) and (b), above, the Fair Market Value thereof shall be determined by the Committee in
good faith.

“Hostile Change in Control” means any Change in Control that is not approved or recommended
by the Board.

“Subsidiary” means any corporation (other than the Company) in an unbroken chain of
corporations beginning with the Company (or any subsequent parent of the Company) if each of the
corporations other than the last corporation in the unbroken chain owns stock
possessing 50% or more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.

 

16

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