Exhibit 10(b)
INTERTAN, INC.
RESTRICTED STOCK UNIT AGREEMENT
THIS AGREEMENT, made as of the 4th day of October, 2000, by and
between INTERTAN, INC., a Delaware corporation (the "Company"), and James G.
Gingerich ("Executive");
W I T N E S S E T H:
WHEREAS, the Organization and Compensation Committee of the Board of
Directors of the Company (the "Committee") acting under the Restricted Stock
Unit Plan of the Company effective as of October 2, 2000 (the "Plan") has
determined that it is desirable to award Restricted Stock Units (as defined in
the Plan) to Executive under the Plan; and
WHEREAS, pursuant to the Plan, the Committee has determined that the
Restricted Stock Units so awarded shall be subject to the restrictions, terms
and conditions of this Agreement;
NOW, THEREFORE, in consideration of the premises and mutual covenants
and agreements herein contained, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
1. Restricted Stock Unit Award. On the terms and conditions and
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subject to the restrictions hereinafter set forth, the Company hereby makes to
Executive, and Executive hereby accepts, a Restricted Stock Unit Award (the
"Award") of an aggregate of 12,000 units (the "Units"), with each Unit
representing a right to acquire one share of common stock, par value $1.00 per
share ("Common Stock"), of the Company. The Award is made effective as of the
date of this Agreement (the "Effective Date"). The Units are fictional devices
for determining the number of shares of Common Stock (the "Shares") to be issued
to Executive upon the satisfaction of applicable vesting conditions set forth
herein and do not constitute a Common Stock equivalent or represent any interest
in or right to the Company's securities. A certificate representing the Shares
underlying the Units shall be delivered to Executive upon vesting of such Units
as hereinafter set forth.
2. Vesting of Restricted Units.
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(a) One-third of the Units shall be vested as of the Effective Date,
and as soon as practicable after the effectiveness of a registration statement
on Form S-8 to be filed with the U.S. Securities and Exchange Commission, a
stock certificate for the Shares underlying such Units shall be issued and
delivered to Executive.
(b) The balance of the Units covered hereby (the "Restricted Units")
shall be subject to a vesting period that shall commence on the Effective Date
and shall terminate on June 30, 2002 (the "Restricted Period"). The maximum
number of Restricted Units that may be fully vested as of the end of each fiscal
year during the Restricted Period shall be as follows:
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Fiscal Year Ending Maximum Number of Restricted Units
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June 30, 2001 4,000
June 30, 2002 4,000
(i) Annual Vesting.
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(A) The maximum number of the Restricted Units set forth above
for a fiscal year ending during the Restricted Period shall be fully vested if
the consolidated operating income growth of the Company for each such fiscal
year is 15% or greater compared to the consolidated operating income of the
immediately preceding year. The effective date of the vesting of such Restricted
Units for any fiscal year (the "Vesting Date") shall be the date the Company's
consolidated operating income growth for such fiscal year is determined as
provided in subparagraph (iv) below.
(B) If the consolidated operating income growth of the Company is
between 10% and 15% compared to the consolidated operating income of the
immediately preceding year for any fiscal year during the Restricted Period, the
following percentage of the maximum number of the Restricted Units for such
fiscal year shall become vested on the Vesting Date for such fiscal year:
- ----------------------------------------------------------- ------------------------------------------------------
Consolidated Operating Income Growth Percentage Entitlement of Maximum Possible Award
- ----------------------------------------------------------- ------------------------------------------------------
10.0 - 10.99% 20%
- ----------------------------------------------------------- ------------------------------------------------------
11.0 - 11.99% 36%
- ----------------------------------------------------------- ------------------------------------------------------
12.0 - 12.99% 52%
- ----------------------------------------------------------- ------------------------------------------------------
13.0 - 13.99% 68%
- ----------------------------------------------------------- ------------------------------------------------------
14.0 - 14.99% 84%
- ----------------------------------------------------------- ------------------------------------------------------
15% or greater 100%
- ----------------------------------------------------------- ------------------------------------------------------
(C) If the consolidated operating income growth of the Company
for any fiscal year is less than 10% compared to the consolidated operating
income of the immediately preceding year, no Restricted Units shall vest for
such fiscal year and such Restricted Units shall be forfeited unless such
Restricted Units are later vested in accordance with subsection (ii) below.
(ii) Three-Year Adjustment Provision.
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(A) If, at the end of the Restricted Period, Executive has not
earned the maximum number of Restricted Units for any fiscal year, but the
consolidated operating growth of the Company compounded annually for the three
fiscal years ending June 30, 2002 is 15% or greater compared to the consolidated
operating income of the fiscal year ending June 30, 1999, then all Restricted
Units not yet fully vested shall vest in their entirety on the date the
Company's consolidated operating growth for the three fiscal years ending June
30, 2002 is determined as provided in subparagraph (iv) below (the "Adjustment
Vesting Date").
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(B) If, at the end of the Restricted Period, Executive has not
earned the maximum number of Restricted Units for any fiscal year, and the
consolidated operating growth of the Company compounded annually for the three
fiscal years ending June 30, 2002 is less than 10% compared to the consolidated
operating income of the fiscal year ending June 30, 1999, all Restricted Units
not yet vested shall be forfeited.
(C) If, at the end of the Restricted Period, Executive has not
earned the maximum number of Restricted Units for any fiscal year, and the
consolidated operating growth compounded annually for the three fiscal years
ending June 30, 2002 is at least 10% but does not exceed 15% compared to the
consolidated operating income of the fiscal year ending June 30, 1999, the
following percentage of the maximum number of the Restricted Units (including,
for purposes of this formula, any Restricted Units which vested during the
Restricted Period) shall become vested on the Adjustment Vesting Date:
- ------------------------------------------------------------ ---------------------------------------------------------------
Consolidated Operating Income Growth Percentage Entitlement of Maximum Possible Award
- ------------------------------------------------------------ ---------------------------------------------------------------
10.0 -- 10.99% 20%
- ------------------------------------------------------------ ---------------------------------------------------------------
11.0 -- 11.99% 36%
- ------------------------------------------------------------ ---------------------------------------------------------------
12.0 -- 12.99% 52%
- ------------------------------------------------------------ ---------------------------------------------------------------
13.0 -- 13.99% 68%
- ------------------------------------------------------------ ---------------------------------------------------------------
14.0 -- 14.99% 84%
- ------------------------------------------------------------ ---------------------------------------------------------------
15% or greater 100%
- ------------------------------------------------------------ ---------------------------------------------------------------
(iii) Limitation on Vesting. Under no circumstances shall
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Executive become vested with respect to a number of Restricted Units that
exceeds his or her maximum entitlement under the Annual Vesting Provision or the
Three-Year Adjustment Provision set forth in subsections (i) and (ii),
respectively, above.
(iv) Consolidated Operating Income. The Company's consolidated
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operating income or consolidated operating income growth for any year shall be
as determined by the Company's independent auditors.
(c) The Restricted Units shall be forfeited to the Company at no cost
to the Company if Executive's employment with the Company or a subsidiary of the
Company terminates prior to the vesting of such Restricted Units; provided,
however, that the Restricted Units shall become fully vested upon (i)
Executive's termination of employment during the Restricted Period due to death,
(ii) the occurrence of a Change of Control (as defined below) during the
Restricted Period, or (iii) the involuntary termination of Executive's
employment with the Company during the Restricted Period for any reason other
than Just Cause (as defined below), if within a one year period beginning on the
date of such termination there occurs a Change of Control. Transfer of
employment without interruption of service between or among the Company and any
of its subsidiaries shall not be considered a termination of employment.
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(d) Upon the vesting of the Restricted Units, the restrictions
applicable to the Restricted Units shall terminate, and as soon as practicable
thereafter a stock certificate for the number of Shares underlying the
Restricted Units that have vested, shall be delivered to Executive or
Executive's beneficiary or estate, as the case may be. Notwithstanding the
foregoing, the Shares underlying the Restricted Units that have vested may only
be sold by Executive in compliance with the provisions of the Securities Act of
1933, as amended.
(e) Notwithstanding anything contained herein to the contrary, (i) the
Committee shall have the right to waive all or any portion of any outstanding
vesting conditions prior to the termination of such vesting conditions with
respect to any or all of the Restricted Units on such terms and conditions as
the Committee may, in writing, deem appropriate and (ii) the provisions of this
Section 2 are subject to the provisions of the Plan.
(f) For purposes of this Agreement, the following terms shall have the
indicated meanings:
Change in Control: A "Change in Control" shall be deemed to have
occurred in the event that:
(i) any person, corporation, partnership, association, joint
stock company, trust, unincorporated organization, or government, including a
political subdivision thereof (or any combination thereof acting for the purpose
of acquiring, holding, voting, or disposing of equity securities of the
Company), acquires beneficial ownership of at least twenty percent (20%) of the
then issued and outstanding Common Stock of the Company; or
(ii) on any day more than fifty percent (50%) of the members of
the Board of Directors of the Company (excluding those members replacing
deceased directors) were not directors two (2) years prior to such date; or
(iii) substantially all the assets of the Company are sold or the
Company is merged or consolidated or otherwise acquired by or with another
corporation (other than a subsidiary of the Company) unless, as the result of
any such merger, consolidation, or acquisition, (a) the Company is the surviving
entity, and (b) not more than twenty percent (20%) of the Company's then issued
and outstanding Common Stock is sold or exchanged as the result of such merger,
consolidation, or acquisition.
(iv) Any provision hereof to the contrary notwithstanding, any
shares of the Company's Common Stock sold or exchanged as the result of any
acquisition agreement initiated by the Company whereby the Company acquires
control of or substantially all the assets of another corporation shall not
constitute a Change of Control.
Just Cause: The term "Just Cause" shall mean dishonest or fraudulent
conduct of Executive or the conviction of Executive of a crime involving moral
turpitude.
3. No Rights as Stockholder. Until the issuance of a certificate or
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certificates representing all or any portion of the Shares underlying the
Restricted Units to Executive, Executive
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shall have no rights as a stockholder, including voting rights, the right to
receive dividends and distributions with respect to and the right to transfer,
pledge, exchange hypothecate or otherwise dispose of the Shares underlying the
Restricted Units; provided that the number of shares underlying each Restricted
Unit may be adjusted in accordance with Section 4.
4. Adjustments. In the event the Company shall effect a split of its
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Common Stock or dividend payable in Common Stock, or in the event the
outstanding Common Stock shall be combined into a smaller number of shares, the
maximum number of Shares underlying the Restricted Units shall be increased or
decreased proportionately.
In the event of a reclassification of the Common Stock not covered by
the foregoing, or in the event of a liquidation or reorganization, including a
merger, consolidation or sale of assets, the Board of Directors shall make such
adjustments, if any, as it may deem appropriate in the number and kind of Shares
underlying the Restricted Units. The provisions of this Section shall only be
applicable if, and only to the extent that, the application thereof does not
conflict with any valid governmental statute, regulation or rule.
5. Withholding Taxes.
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(a) No later than the date of the issuance of Shares underlying any of
the Restricted Units set forth herein, Executive will pay to the Company or its
subsidiaries for remittance to the tax authorities, or make arrangements
satisfactory to the Committee regarding payment of, any foreign, federal,
provincial or local taxes of any kind ("Taxes") required by law to be withheld
with respect to the Restricted Units with respect to which such restrictions
have terminated.
(b) Any provision of this Agreement to the contrary notwithstanding,
if Executive does not otherwise satisfy the obligation of Executive under
Section 5(a) of this Agreement, then the Company and its subsidiaries shall, to
the extent permitted by law, have the right to deduct from any payments of any
kind otherwise due from the Company or its subsidiaries to or with respect to
Executive, whether or not pursuant to this Agreement or the Plan and regardless
of the form of payment, any Taxes required by law to be withheld with respect to
vested Shares underlying the Restricted Units and shall remit such Taxes to the
tax authorities on behalf of Executive.
6. Non-Assignability. The Award is not assignable or transferable by
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Executive.
7. Plan Provisions. By execution of this Agreement, Executive agrees
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that the Award and the Units shall be governed by and subject to all applicable
provisions of the Plan. This Agreement is subject to the Plan, and the Plan
shall govern where there is any inconsistency between the Plan and this
Agreement.
8. Governing Law. This Agreement shall be governed by and construed
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and enforced in accordance with the laws of the State of Delaware, without
regard to the principles of conflicts of laws thereof.
9. Binding Effect. This Agreement shall be binding upon and inure to
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the benefit of the parties hereto and their respective heirs, personal
representatives, successors and permitted assigns;
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provided, however, that Executive shall not assign or otherwise transfer this
Agreement or any of Executive's rights or obligations hereunder.
10. Entire Agreement; Amendment. This Agreement constitutes the entire
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agreement between the parties hereto with respect to the subject matter hereof
and supersedes all prior agreements and understandings, whether written or oral,
between the parties with respect to the subject matter hereof. Without limiting
the generality of the foregoing, the parties hereto agree and acknowledge that
this Agreement and the awards granted herein supersede the letter dated June 9,
1999 and any awards referenced therein. To the fullest extent provided by
applicable law, this Agreement may be amended, modified and supplemented by
mutual consent of the parties hereto at any time, with respect to any of the
terms contained herein, in such manner as may be agreed upon in writing by such
parties.
11. Notices. All notices required or permitted to be given or made
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under this Agreement shall be in writing and shall be deemed to have been duly
given or made if (a) delivered personally, (b) transmitted by first class
registered or certified Canadian or United States mail, postage prepaid, return
receipt requested, (c) sent by prepaid overnight courier service or (d) sent by
telecopy or facsimile transmission, answer back requested, to the person who is
to receive it at the address that such person has theretofore specified by
written notice delivered in accordance herewith. Such notices shall be effective
(a) if delivered personally or sent by courier service, upon actual receipt by
the intended recipient, (b) if mailed, upon the earlier of five days after
deposit in the mail or the date of delivery as shown by the return receipt
therefor or (c) if sent by telecopy or facsimile transmission, when the answer
back is received. The Company or Executive may change, at any time and from time
to time, by written notice to the other, the address that the Company or
Executive had theretofore specified for receiving notices. Until such address is
changed in accordance herewith, notices under this Agreement shall be delivered
or sent (a) to Executive at Executive's address as set forth in the records of
the Company or (b) to the Company at the principal executive offices of the
Company clearly marked "Attention: President."
12. Severability. If any provision of this Agreement is held to be
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unenforceable, this Agreement shall be considered divisible and such provision
shall be deemed inoperative to the extent it is deemed unenforceable, and in all
other respects this Agreement shall remain in full force and effect; provided,
however, that if any such provision may be made enforceable by limitation
thereof, then such provision shall be deemed to be so limited and shall be
enforceable to the maximum extent permitted by applicable law.
13. Counterparts. This Agreement may be executed by the parties hereto
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in any number of counterparts, each of which shall be deemed an original, but
all of which shall constitute one and the same agreement. Each counterpart may
consist of a number of copies hereof each signed by less than all, but together
signed by all, the parties hereto.
14. Descriptive Headings. The descriptive headings herein are inserted
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for convenience of reference only, do not constitute a part of this Agreement,
and shall not affect in any manner the meaning or interpretation of this
Agreement.
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15. Gender. Pronouns in masculine, feminine and neuter genders shall
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be construed to include any other gender, and words in the singular form shall
be construed to include the plural and vice versa, unless the context otherwise
requires.
16. References. The words "this Agreement," "herein," "hereof,"
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"hereby," "hereunder" and words of similar import refer to this Agreement as a
whole and not to any particular subdivision unless expressly so limited.
17. Employment. Nothing in this Agreement shall be deemed to
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constitute a promise or guarantee by the Company or its subsidiaries to
Executive of continuing employment.
18. Beneficiary Designation. Executive shall have the right to
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designate a beneficiary to receive the stock certificates for the Shares
underlying the Restricted Units that have vested Executive under the Plan as of
the date of Executive's death. In the event no such beneficiary is designated,
such stock certificates shall be delivered to Executive's estate.
IN WITNESS WHEREOF, the Company and Executive have executed this
Agreement as of the date first above written.
INTERTAN, INC.
By: /s/ Jeffrey A. Losch
Name: Jeffrey A. Losch
Title: Vice President, General
Counsel & Secretary
/s/ James G. Gingerich
James G. Gingerich
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