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EXHIBIT 4.5
PLAYBOY ENTERPRISES, INC.
RESTRICTED STOCK AGREEMENT
THIS RESTRICTED STOCK AGREEMENT (the "Agreement"), dated ___________ __,
199__ (the "Award Date"), is made by and between PLAYBOY ENTERPRISES, INC., a
Delaware corporation (the "Company"), and _____________________, an employee of
the Company or a Subsidiary (the "Employee"):
WHEREAS, the Company has established the 1995 Playboy Enterprises, Inc.
Stock Incentive Plan (the "Plan"); and
WHEREAS, the Company wishes to carry out the Plan (the terms of which are
hereby incorporated by reference and made a part of this Agreement, and which
shall control in the event of any inconsistency between this Agreement and the
Plan or any interpretation of this Agreement); and
WHEREAS, the Plan provides for the issuance of shares of the Company's
Common Stock (as defined hereunder), subject to certain restrictions thereon
(hereinafter referred to as "Restricted Stock"); and
WHEREAS, the Stock Option Committee of the Company's Board of Directors (the
"Committee"), appointed to administer the Plan, has determined that it would be
in the best interest of the Company to issue the shares of Restricted Stock
provided for herein to the Employee in partial consideration of past services
to the Company and/or its Subsidiaries and to provide further incentives for
performance and continued service during the vesting periods provided herein,
and has advised the Company thereof and instructed the undersigned Officers (as
defined hereunder) to issue said Restricted Stock;
NOW, THEREFORE, in consideration of the mutual covenants herein contained
and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereby agree as follows:
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ARTICLE I
DEFINITIONS
Whenever the following terms are used below in this Agreement, they shall
have the meaning specified below unless the context clearly indicates to the
contrary. Capitalized terms not otherwise defined herein shall have the
meanings set forth in the Plan.
Section 1.1 - Change of Control
"Change of Control" shall mean the occurrence of any of the following
events: (i) except in a transaction described in clause (iii) below, Hugh M.
Hefner, Christie Hefner, the Hugh M. Hefner 1991 Trust (for so long as Hugh M.
Hefner and Christie Hefner are joint trustees or one of them is sole trustee),
and the Hugh M. Hefner Foundation (for so long as Hugh M. Hefner and Christie
Hefner are joint trustees or one of them is sole trustee) cease collectively to
own a majority of the total number of votes that may be cast for the election
of directors of the Company; or (ii) a sale of Playboy magazine by the Company;
or (iii) the liquidation or dissolution of the Company, or any merger,
consolidation or other reorganization involving the Company unless (x) the
merger, consolidation or other reorganization is initiated by the Company, and
(y) is one in which the stockholders of the Company immediately prior to such
reorganization become the majority stockholders of a successor or ultimate
parent corporation of the Company resulting from such reorganization and (z) in
connection with such event, provision is made for an assumption of outstanding
Options and rights or a substitution thereof of a new Option or right in such
successor or ultimate parent of substantially equivalent value.
Section 1.2 - Common Stock
"Common Stock" shall mean the Class B Common Stock, par value $.01 per
share, of the Company.
Section 1.3 - Exchange Act
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
Section 1.4 - Plan
"Plan" shall mean the 1995 Playboy Enterprises, Inc. Stock Incentive Plan.
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Section 1.5 - Restrictions
"Restrictions" shall mean the transferability restrictions imposed upon
Restricted Stock under this Agreement.
Section 1.6 - Restricted Stock
"Restricted Stock" shall mean Common Stock of the Company issued under this
Agreement and subject to the Restrictions imposed hereunder.
Section 1.7 - Rule 16b-3
"Rule 16b-3" shall mean that certain Rule 16b-3 under the Exchange Act, as
such Rule may be amended in the future.
Section 1.8 - Secretary
"Secretary" shall mean the Secretary of the Company.
Section 1.9 - Securities Act
"Securities Act" shall mean the Securities Act of 1933, as amended.
Section 1.10 - Termination of Employment
"Termination of Employment" shall mean the time when the employee-employer
relationship between the Restricted Stockholder and the Company or any
Subsidiary is terminated, voluntarily or involuntarily, for any reason, with or
without Cause (as defined below), including, but not by way of limitation, a
termination by resignation, discharge, death, disability or retirement, but
excluding any termination where there is simultaneous reemployment by the
Company or a Subsidiary. The Committee, subject to the definition of Cause
below, shall determine the effect of all other matters and questions relating
to Termination of Employment, including, but not by way of limitation, the
question of whether particular leaves of absence constitute Terminations of
Employment. For purposes of the Plan, "Cause" shall mean an Employee's (a)
gross negligence in the performance of the responsibilities of such Employee's
office or position; (b) any act of dishonesty or moral turpitude materially
adversely affecting the Company or the Company's reputation; (c) commission of
any other willful or intentional act that could reasonably be expected to
injure materially the reputation, business or business relationships of the
Company or any Subsidiary; or (d) conviction of a felony or of any crime
involving moral turpitude, fraud or misrepresentation.
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Section 1.11 - Vested Stock
"Vested Stock" shall mean Restricted Stock with respect to which the
Employee has satisfied the time or performance vesting standards of the
Agreement as specified in Article III.
ARTICLE II
ISSUANCE OF RESTRICTED STOCK
Section 2.1 - Issuance of Restricted Stock
In consideration of the Employee's agreement to remain in the employ of the
Company until some or all of the Restrictions hereunder shall have lapsed, for
past services rendered to the Company and for other good and valuable
consideration which the Committee has determined to be equal to not less than
the par value of the Restricted Stock issued hereunder, on the date hereof the
Company issues to the Employee ____________ shares of its Class B Common Stock,
par value $.01 per share, upon the terms, conditions and restrictions set forth
in this Agreement.
Section 2.2 - No Right to Continued Employment
Nothing in this Agreement or in the Plan shall confer upon the Employee any
right to continue in the employ of the Company or any Subsidiary or shall
interfere with or restrict in any way the rights of the Company or any
Subsidiary, which are hereby expressly reserved, to discharge the Employee at
any time for any reason whatsoever, with or without Cause.
ARTICLE III
RESTRICTIONS
Section 3.1 - Vesting Period
All Restrictions will lapse automatically and Vested Stock will be issued on
June 30, 2005, if and only if (i) there has been no Termination of Employment
of the Employee for any reason prior to such date, and (ii) there has been no
forfeiture of shares due to a Change of Control as specified in Section 3.8
prior to such date.
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Section 3.2 - Accelerated Vesting; Performance Goals
Performance goals have been established as a condition to accelerated
vesting of the Restricted Stock. The performance goals are based on the
Company's "Operating Income" as such term is used and determined by the Company
for purposes of the Company's financial reports filed with the Securities and
Exchange Commission under the Exchange Act. Operating Income will be measured
before any unusual or "one-time" economic or accounting instances which would
distort the actual Operating Income of the Company as determined by the
Committee, which may rely in its discretion on the Company's publicly reported
Operating Income Before One-Time Items. The Restrictions will lapse with
respect to specified percentages of the shares of Restricted Stock subject to
this award, without duplication, at the end of any fiscal year of the Company,
beginning with the fiscal year ended June 30, 1995, during which Operating
Income first equals or exceeds each of the following thresholds:
Annual Operating Percentage of Total
---------------- -------------------
Income Goal Restricted Stock Award
----------- ----------------------
($ million)
-----------
7.5 25%
10.0 25%
15.0 25%
20.0 25%
For example, if no Restrictions have yet lapsed, and the Company's Operating
Income equals $8.0 million in a given year, the restrictions would lapse with
respect to 25% of the Restricted Stock, whereas if 25% of the Restricted Stock
had previously vested no additional Restricted Stock would vest; if in a
subsequent fiscal year, Operating Income equals $16.0 million, the restrictions
would lapse with respect to an additional 50% of the Restricted Stock, and so
on.
The lapse of the Restrictions in any year shall be effective only when the
Company's independent auditors shall have issued their audit report with
respect to such year.
Section 3.3 - Right to Payment of Restricted Stock
Upon issuance of an independent auditor's report with respect to each fiscal
year, a determination will be made as to the amount of Restricted Stock earned,
if any, on the basis of the vesting guidelines in Section 3.1 and 3.2 and what
Restricted Stock has thereby become Vested Stock. Participants must be
employed by the Company or by a Subsidiary as of the last day of each fiscal
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year in order to receive any Vested Stock which may have vested during that
year. Unlegended stock certificates will be issued to participants only when
the independent audit report confirms that vesting requirements have been
satisfied; pending such issuance, Restricted Stock will be held in book entry
form by the Company as custodian for the Employee. Unless the Secretary
determines that certificates must be issued pursuant to applicable law or
contractual obligations, Restricted Stock shall not be issued to the Employee
in certificated form. The Secretary of the Company shall establish book entry
procedures sufficient to prevent unauthorized transfers of the Restricted
Stock.
Section 3.4 - Legend
The Secretary shall, or shall instruct the Company's transfer agent to,
provide stop transfer instructions in the Company's stock records to prevent
any transfer of the Restricted Stock for any purpose until the stock is vested.
Any certificate that the Secretary or the transfer agent deems necessary to
issue to represent shares of Restricted Stock shall, until all restrictions
lapse and new certificates are issued pursuant to Section 3.5, bear the
following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN VESTING
REQUIREMENTS AND MAY BE SUBJECT TO REACQUISITION BY THE COMPANY UNDER THE
TERMS OF THAT CERTAIN RESTRICTED STOCK AGREEMENT BY AND BETWEEN PLAYBOY
ENTERPRISES, INC. (THE "COMPANY") AND THE HOLDER OF THE SECURITIES. PRIOR TO
VESTING OF OWNERSHIP IN THE SECURITIES, THEY MAY NOT BE, DIRECTLY OR
INDIRECTLY, OFFERED, TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR
OTHERWISE DISPOSED OF UNDER ANY CIRCUMSTANCES. COPIES OF THE ABOVE
REFERENCED AGREEMENT ARE ON FILE AT THE OFFICES OF THE COMPANY AT 680 NORTH
LAKE SHORE DRIVE, CHICAGO, IL 60611.
Section 3.5 - Lapse of Restrictions
Upon the vesting of the shares of Restricted Stock as provided in Sections
3.1 through 3.3 and subject to Sections 4.2 and 4.3, the Company shall cause
new certificates to be issued with respect to such Vested Stock and delivered
to the Employee or his legal representative, free from the legend provided for
in Section 3.4 and any of the other Restrictions. Such Vested Stock shall
thereupon cease to be considered Restricted Stock subject to the terms and
conditions of this Agreement.
Section 3.6 - Restricted Stock Not Transferable
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Prior to the issuance of Vested Stock, no Restricted Stock or any interest
or right therein or part thereof shall be liable for the debts, contracts or
engagements of the Employee or his successors in interest or shall be subject
to disposition by transfer, alienation, anticipation, pledge, encumbrance,
assignment or any other means whether such disposition be voluntary or
involuntary or by operation of law by judgment, levy, attachment, garnishment
or any other legal or equitable proceedings (including bankruptcy), and any
attempted disposition thereof shall be null and void and of no effect.
Section 3.7 - Termination of Employment
If there is a Termination of Employment for any reason, whether voluntarily
or involuntarily, with or without Cause, by retirement or by reason of death or
disability or otherwise, at any time prior to June 30, 2005, the Employee shall
forfeit all unvested Restricted Stock, and all Restricted Stock shall, on the
effective date of such Termination of Employment, be immediately cancelled and
returned to the status of authorized and unissued Common Stock.
Notwithstanding the foregoing, if an Employee was employed on the last day of a
fiscal year and there is a Termination of Employment of such Employee prior to
the issuance of an independent audit report that shows that Restrictions have
lapsed with respect to any unvested Restricted Stock during such fiscal year,
such Employee shall receive Vested Stock with respect to such Restricted Stock
notwithstanding such Termination of Employment.
Section 3.8 - Change of Control
Upon a Change of Control specified in clause (iii) of the definition
thereof, any Restricted Stock that has not vested shall be forfeited on the
effective date of such Change of Control, and all Restricted Stock shall, on
the effective date of such Change of Control, be immediately cancelled and
returned to the status of authorized and unissued Common Stock; provided,
however, that a Change of Control specified in clause (i) or (ii) of the
definition thereof occurs, such Restricted Stock shall remain outstanding,
subject to any remaining Restrictions.
Section 3.9 - Changes in Common Stock
In the event that the outstanding shares of the Company's Common Stock are
changed into or exchanged for a different number or kind of shares or other
securities of the Company pursuant to a recapitalization, reclassification,
stock split-up, stock dividend, or other combination of shares or similar
transaction, any new, additional or different shares or securities which are
issued in the name of the Employee as a holder of Restricted Stock shall be
considered to be Restricted Stock and shall be subject to all of the
Restrictions.
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ARTICLE IV
MISCELLANEOUS
Section 4.1 - Administration
The Committee shall have the power to interpret the Plan, this Agreement and
all other documents relating to Restricted Stock and to adopt such rules for
the administration, interpretation and application of the Plan as are
consistent herewith and to interpret, amend or revoke any such rules. All
actions taken and all interpretations and determinations made by the Committee
in good faith shall be final and binding upon the Employee, the Company and all
other interested persons. No member of the Committee shall be personally
liable for any action, determination or interpretation made in good faith with
respect to the Plan or Restricted Stock and all members of the Committee shall
be fully protected by the Company in respect to any such action, determination
or interpretation. In its absolute discretion, the Board may at any time and
from time to time exercise any and all rights and duties of the Committee under
this Plan except with respect to matters which under Rule 16b-3 or Section
162(m) of the Internal Revenue Code of 1986, as amended, or any regulations or
rules issued thereunder, are required to be determined in the sole discretion
of the Committee.
Section 4.2 - Approval of Plan by Stockholders
The Restricted Stock will not vest prior to the approval of the Plan by the
stockholders, and, if such approval has not been obtained 12 months after the
date of the Board's initial adoption of the Plan, such Restricted Stock shall
thereupon be cancelled and become null and void.
Section 4.3 - Conditions to Issuance of Stock Certificates
The Company shall not be required to issue or deliver any certificate or
certificates for Vested Stock pursuant to this Agreement prior to fulfillment
of all of the following conditions:
(a) The admission of such shares to listing on all stock
exchanges on which such class of stock is then listed; and
(b) The completion of any registration or other qualification
of such shares under any state or Federal law or under rulings or
regulations of the Securities and Exchange Commission or of any other
governmental regulatory body, which the Committee shall, in its absolute
discretion, deem necessary or advisable; and
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(c) The obtaining of any approval or other clearance from any state
or Federal governmental agency which the Committee shall, in its absolute
discretion, determine to be necessary or advisable; and
(d) Subject to the provisions of Section 4.8 the payment by the
Employee of all amounts required to be withheld, under federal, state and
local tax laws, with respect to the issuance of Restricted Stock and/or
the lapse or removal of any of the Restrictions; and
(e) The lapse of such reasonable period of time as the Committee may
establish from time to time for reasons of administrative convenience.
Section 4.4 - Notices
Any notice to be given under the terms of this Agreement will be by
registered mail, return receipt requested and if to the Company shall be
addressed in care of its Secretary at 680 N. Lake Shore Drive, Chicago,
Illinois 60611, and any notice to be given to the Employee shall be addressed
to the Employee at the address given beneath the Employee's signature hereto.
By a notice given pursuant to this Section 4.4, either party may hereafter
designate a different address for notices to be given to the Company or such
Employee. Any notice which is required to be given to the Employee shall, if
the Employee is then deceased, be given to the Employee's personal
representative if such representative has previously informed the Company of
such Employee's status and address by written notice under this Section 4.4.
Any notice shall have been deemed duly given when received.
Section 4.5 - Rights as Stockholder
Upon issuance of the Restricted Stock in the name of the Employee, the
Employee shall have all the rights of a stockholder with respect to said shares
including the right to receive all dividends and other distributions paid or
made with respect to the shares.
Section 4.6 - Titles
Titles are provided herein for convenience only and are not to serve as a
basis for interpretation or construction of this Agreement.
Section 4.7 - Amendment
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This Agreement may be amended only by a writing executed by the parties
hereto which specifically states that it is amending this Agreement.
Section 4.8 - Tax Withholding
The Company's obligation (i) to issue or deliver to the Employee any
certificate or certificates for Vested Stock or (ii) to pay to the Employee any
dividends or make any distributions with respect to the Restricted Stock, is
expressly conditioned upon receipt from the Employee, on or prior to the date
the same is required to be withheld, of:
(a) Full payment (in cash or by check) of any amount that must be
withheld by the Company for federal, state and/or local tax purposes; or
(b) Subject to the Committee's consent and Section 4.8(c), full
payment by delivery to the Company of unrestricted shares of the Company's
Common Stock previously owned by the Employee duly endorsed for transfer to
the Company by the Employee with an aggregate fair market value equal to the
amount that must be withheld by the Company for federal, state and/or local
tax purposes; or
(c) With respect to the withholding obligation for shares of
Restricted Stock that become unrestricted shares of stock as of a certain
date (the "Vesting Date"), subject to the Committee's consent and to the
timing requirements set forth in this Section 4.8(c), full payment by
retention by the Company of a portion of such shares of Restricted Stock
which become Vested Stock with an aggregate fair market value (determined
as of the Vesting Date) equal to the amount that must be withheld by the
Company for federal, state and/or local tax purposes. To the extent such
limitation is required by Rule 16b-3, as then in effect, such shares of
Restricted Stock which become Vested Stock as of the Vesting Date may be
used to satisfy the tax withholding consequences of such lapse of
restrictions or vesting only (i) during the period beginning on the third
business day following the date of release of the quarterly or annual
summary statement of sales and earnings of the Company and ending on the
twelfth business day following such date or (ii) pursuant to an irrevocable
written election by the Employee to use shares of Restricted Stock which
become Vested Stock as of the Vesting Date to pay all or part of the
withholding taxes (subject to the approval of the Committee) made at least
six months prior to the payment of such withholding taxes; or
(d) Subject to the Committee's consent, any combination of payments
provided for in the foregoing subsections (a), (b) or (c).
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Section 4.9 - Governing Law
The laws of the State of Delaware shall govern the interpretation, validity,
administration, enforcement and performance of the terms of this Agreement
regardless of the law that might be applied under principles of conflicts of
laws.
IN WITNESS HEREOF, this Agreement has been executed and delivered by the
parties hereto.
PLAYBOY ENTERPRISES, INC.
By ___________________________
Its __________________________
___________________________
Employee
____________________________
____________________________
Address
____________________________
Employee Tax I.D. Number
Restricted Stock Issued: _______________ shares
Par Value of Stock: $.01 per share
Date Issued:
_________________
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