UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 16, 2012
Bakers Footwear Group, Inc.
(Exact Name of Registrant as Specified in Charter)
| Missouri | 000-50563 | 43-0577980 | ||
| (State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification Number) | ||
| 2815 Scott Avenue St. Louis, Missouri |
63103 | |||
| (Address of Principal Executive Offices) | (Zip Code) | |||
Registrant’s telephone number, including area code: (314) 621-0699
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
2012 Incentive Compensation Plan
On April 16, 2012, the Board of Directors of Bakers Footwear Group, Inc. (the “Company”) adopted the Bakers Footwear Group, Inc. 2012 Incentive Compensation Plan (the “Plan”). The Plan provides for awards of restricted stock units to the Company’s executive officers, managers, other salaried employees, consultants, and members of the Company’s Board of Directors. The Plan is intended to incentivize and reward management to create shareholder value, including an increase in stock price, and will be effective concurrently with the Company’s existing 2005 Incentive Compensation Plan and 2003 Stock Option Plan, which will continue to provide for other types of equity incentive compensation.
The compensation committee of the Board of Directors (the “Committee”) will administer the Plan and will have plenary authority to determine to whom and the times at which awards will be made under the Plan. The Committee will have plenary authority to interpret the Plan, to prescribe, amend and rescind rules and regulations relating to the Plan and to determine the terms and provisions of the awards granted under the Plan.
The number of shares of the Company’s common stock that may be granted pursuant to awards of restricted stock units under the Plan may not exceed 1,010,000 (which number shall be adjusted to reflect any subsequent stock dividends, stock splits, reverse stock splits and similar matters affecting the number of outstanding shares of our common stock). In the event an award of restricted stock units is canceled, forfeited, terminated or otherwise expires due to termination of a participant’s employment, failure to meet performance objectives, or for any other reason, the Committee may again use the shares related to such award for the granting of subsequent awards.
The number of shares with respect to which restricted stock units may be granted to any individual during any one year may not exceed 250,000 shares, subject to the anti-dilution provisions provided in the Plan.
Restricted stock units awarded under the Plan represent the right, subject to forfeiture, of the participant to receive shares of common stock if specified vesting criteria are achieved. The period of vesting and the forfeiture restrictions of the restricted stock units, which may include price appreciation of the Company’s common stock, restrictions on transferability, requirements of continued employment, achievement of individual goals, among others, will be established by the Committee at the time of grant, except that each restriction period will not be less than two years. Holders of restricted stock units will not be entitled to voting or dividends.
Restricted stock unit awards will be forfeited automatically by a participant whose employment (or capacity as a director) with the Company or a subsidiary is terminated, with or without cause, prior to the vesting and payout of the award. However, the Committee may, in its absolute discretion, vest and payout such restricted stock units in full, pro-rata, or not at all, as it may determine, to a participant whose employment (or capacity as a director) terminates on account of death, disability or otherwise prior to the vesting of the award. If termination is on account of death, the Committee may in its absolute discretion vest the restricted stock units in the participant’s surviving spouse, heirs or estate, as the Committee may determine.
In the event of a change of control (as defined in the Plan), participants then holding awards of restricted stock units will be entitled to receive payout of the restricted stock units, or equivalent value, free of any conditions as if the specified restricted periods had elapsed and any performance objectives applicable to the awards had been fully achieved.
The Plan may be amended at any time by the Committee. Unless terminated at an earlier date by the Committee, the Plan will terminate on April 16, 2017, but restricted stock unit awards outstanding at the termination of the Plan will continue in accordance with their terms. Awards under the Plan may not be made prior to the filing and effectiveness of a registration statement relating to the shares of common stock issuable pursuant to the Plan.
Form of RSU Award Agreement
On April 16, 2012, the Board of Directors also adopted a form of restricted stock unit award agreement (the “RSU Award Agreement”), pursuant to which awards may be granted under the Plan.
Under the RSU Award Agreement, the awards will vest and each participant will be entitled to receive a specified amount of the Company’s common stock after a participant (i) has been continuously employed by the Company (or in the service as a director) for two years from the date the award is granted and (ii) the conditions of at least the first of three “vesting triggers” is satisfied. Satisfaction of each vesting trigger is a condition to vesting of an additional 1/3 of the total amount of the award. The first vesting trigger occurs when the Fair Market Value (based on the closing price of the Company’s common stock as defined in the RSU Award Agreement and the Plan) of the Company’s common stock closes at or above $2.00 per share for ten consecutive Trading Days (as defined in the RSU Award Agreement). The second vesting trigger occurs when the Fair Market Value of the Company’s common stock closes at or above $2.50 per share for ten consecutive Trading Days. The third vesting trigger occurs when the Fair Market Value of the Company’s common stock closes at or above $3.00 per share for ten consecutive Trading Days. The awards expire on the fifth anniversary of the date of grant to the extent any vesting triggers have not been satisfied by that date.
In addition to the vesting requirements, the awards will be forfeited if the participant is not continuously employed (or in service as a director) until, and including, the date of payout in common stock. However, the Committee may, in its sole and absolute discretion, consistent with tax rules, vest and immediately issue common stock with respect to an award in full, pro rata, or otherwise, or not at all, as determined by the Committee, including on termination of employment, death, disability, or otherwise. Under the RSU Award Agreement, generally, common stock will be paid out in four quarterly installments after an award vests, subject to the Committee’s discretion.
The foregoing description is only a summary and does not purport to be complete and is qualified in its entirety by reference to the RSU Award Agreement filed as Exhibit 10.2 hereto, which exhibit is incorporated by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits. See Exhibit Index.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| BAKERS FOOTWEAR GROUP, INC. | ||||||
| Date: April 20, 2012 | By: | /s/ Charles R. Daniel, III | ||||
| Charles R. Daniel, III Executive Vice President, Chief Financial Officer, Controller, Treasurer and Secretary | ||||||
EXHIBIT INDEX
| Exhibit No. |
Description of Exhibit | |
| 10.1 | Bakers Footwear Group, Inc. 2012 Incentive Compensation Plan. | |
| 10.2 | Form of RSU Award Agreement. | |
Exhibit 10.1
BAKERS FOOTWEAR GROUP, INC.
2012 INCENTIVE COMPENSATION PLAN
| 1. | Purpose of the Plan. |
The Bakers Footwear Group, Inc. 2012 Incentive Compensation Plan (the “Plan”) has been established by Bakers Footwear Group, Inc., a Missouri corporation (the “Company”), to:
(a) attract and retain executive, managerial, other salaried employees, consultants and members of the Company’s Board of Directors (“Directors”);
(b) reward management for creating value for shareholders;
(c) motivate participants to achieve long-range goals;
(d) provide incentive compensation opportunities that are competitive with those of other similar businesses; and
(e) further align a participant’s interests with those of the Company’s stockholders through compensation that is based on the Company’s common stock, and thereby promote the long-term financial interests of the Company, including the growth in value of the Company’s equity and enhancement of long-term stockholder returns.
| 2. | Awards Under the Plan. |
Awards granted under the Plan (“Awards”) shall be restricted stock units as described in Section 7 (“Restricted Stock Unit” or “RSU” Awards).
| 3. | Stock Subject to the Plan. |
One million ten thousand (1,010,000) shares of the authorized but unissued common stock, par value of $0.0001 per share, of the Company (“Common Stock”) have been allocated to the Plan for awards under the Plan. The Company may, in its discretion, use shares held in the treasury in lieu of authorized but unissued shares. The number of shares allocated to the Plan shall be adjusted to reflect subsequent stock dividends, stock splits, reverse stock splits, and similar matters affecting the number of outstanding shares of Common Stock. In the event any Restricted Stock Unit Award is cancelled, forfeited, terminated or otherwise expires on account of termination of a participant’s employment (or capacity as a Director), failure to meet vesting terms, or for any other reason, the shares related to such award shall again be available for purposes of the Plan.
| 4. | Administration. |
(a) Generally. The Plan shall be administered by the Committee referred to in Section 5 (the “Committee”). The Committee shall have plenary authority, in its discretion, to determine the individuals to whom, and the time or times at which Restricted Stock Unit Awards shall be granted and the number of shares to be subject to each award. In making such determinations the Committee may take into account the nature of the services rendered by the respective individuals, their present and potential contributions to the Company’s success, and such other factors as the Committee, in its discretion, shall deem relevant. The Committee shall also have plenary authority to interpret the Plan, to prescribe, amend and rescind rules and regulations relating to it and any applicable Award agreement, to determine the terms and provisions of the respective Restricted Stock Unit Awards (which need not be identical) and to make all other determinations necessary or advisable for the administration of the Plan. The Committee may correct any defect, supply an omission or reconcile any inconsistency in the Plan or in any Award in the manner and to the extent it shall deem desirable to carry it into effect. The Committee’s determinations on the matters referred to in this Section 4 shall be conclusive.
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(b) Delegation. The Committee may, in its discretion, delegate to the Chief Executive Officer (“CEO”) of the Company the authority to determine the individuals to whom, and the time or times at which and terms upon which, RSU Awards shall be granted; provided, however, that the Committee may not delegate such authority to the CEO with respect to non-employee Directors or employees of the Company who are subject to the reporting requirements of Section 16(a) of the Securities Exchange Act of 1934.
| 5. | The Committee. |
The Committee shall be the Compensation Committee of the Board of Directors, or such other committee of the Board of Directors as may be authorized from time to time by the Board of Directors.
| 6. | Eligibility. |
Restricted Stock Unit Awards may be granted to: Directors, executive, managerial and other salaried employees, and consultants, of the Company, its subsidiaries or any subsidiary of its subsidiaries, who may, but need not be, officers of the Company, or of its subsidiaries or divisions, who are determined by the Committee in its discretion, to be important to the future success of the Company (which such determination shall be conclusively evidenced by a grant or award under this Plan).
| 7. | Restricted Stock Unit Awards. |
(a) RSUs. A Restricted Stock Unit constitutes a book keeping entry or other evidence maintained by the Company that represents the right (subject to forfeiture) of a participant in the Plan (“Participant”) to receive one share of Common Stock to be issued and delivered in accordance with the terms and conditions set forth herein and any additional terms and conditions that may be set forth in a written instrument evidencing the Restricted Stock Unit.
(b) Grant of RSUs. Restricted Stock Unit awards shall be awarded in such numbers and at such times as the Committee shall determine. RSU Awards shall be subject to such terms and conditions or restrictions as the Committee deems appropriate including, but not limited to, price appreciation of the Common Stock, restrictions on transferability, requirements of continued employment, achievement of individual goals, or any combination thereof. The period of vesting and the forfeiture restrictions shall be established by the Committee at the time of grant, except that each restriction period shall not be less than two years. The RSUs granted thereunder shall be forfeited automatically by a Participant whose employment (or capacity as a Director) with the Company or a subsidiary is terminated, with or without cause, prior to the vesting and payout of the RSUs. Notwithstanding the foregoing, the Committee may, in its absolute discretion, vest and payout such RSUs in full, pro-rata, or not at all, as it may determine, to a Participant whose employment (or capacity as a Director) terminates on account of death, disability or otherwise prior to the vesting of the RSU Award. If termination is on account of death, the Committee may in its absolute discretion vest such RSUs in the Participant’s surviving spouse, heirs or estate, in such portion or no portion as the Committee may determine.
(c) No Rights. RSUs represent an unsecured promise of the Company to issue shares of Common Stock of the Company in the future if conditions are met as determined by the
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Committee, the Plan and the Award agreement. A Participant shall have no rights of a shareholder of the Company until such RSUs have vested and the related shares of Common Stock have been issued.
(d) Transferability. Unless otherwise determined by the Committee, the RSUs (or any rights relating thereto) shall not be sold, assigned, pledged, exchanged, hypothecated or otherwise transferred except by will or the laws of descent and distribution. Any other attempted assignment of any RSUs shall be null and void. The Company shall not be required to honor the transfer of any RSUs that have been sold or otherwise transferred in violation of any of the provisions of an Award agreement or the Plan.
(e) Maximum. The maximum number of RSUs which may be awarded to any individual for any one year shall be 250,000 shares (subject to the anti-dilution provisions in Section 3).
(f) Fair Market Value. “Fair Market Value” of a share of Common Stock on any date of reference shall mean the Closing Price (as defined below) of the Common Stock on the Trading Day (defined below) immediately preceding such day, unless the Committee or Board of Directors determines otherwise, in good faith, in a fair and uniform manner. For the purpose of determining Fair Market Value, the “Closing Price” of the Common Stock on any Trading Day shall be (i) if the Common Stock is listed or admitted for trading on any United States national securities exchange, or if actual transactions are otherwise reported on a consolidated transaction reporting system, the last reported sale price of Common Stock on such exchange or reporting system, as reported in any newspaper of general circulation, (ii) if the Common Stock is quoted on the National Association of Securities Dealers Automated Quotation System (“NASDAQ”), the OTC Bulletin Board, or any similar system of automated dissemination of quotations of securities prices in common use, the last reported sale price of Common Stock on such system or, if sales prices are not reported, the mean between the closing high bid and low asked quotations for such day of Common Stock on such system, as reported in any newspaper of general circulation or (iii) if neither clause (i) or (ii) is applicable, the mean between the high bid and low asked quotations for the Common Stock as reported by the National Quotation Bureau, Incorporated (or its successor) if at least two securities dealers have inserted both bid and asked quotations for Common Stock on at least five of the ten preceding days. Trading Day means any business day, provided that if no sales of Common Stock were made on that date, such Trading Day shall be disregarded.
| 8. | Additional Provisions. |
(a) No adjustment shall be made in the RSUs awarded on account of cash dividends which may be paid, or other rights which may be issued to, the holders of Common Stock during the term of the Plan except as stated in Section 9 below.
(b) No Participant in the Plan shall have any right because of being a Participant in the Plan to continue in the employ (or capacity as a Director) of the Company or of any of its subsidiaries for any period of time, or any right to a continuation of the Participant’s present or any other level of compensation; and such rights and powers as the Company now has or which it may have in the future to dismiss or discharge any Participant from employment (or capacity as a Director) or to change the assignments of any Participant are expressly reserved to the Company.
(c) The Company, at the time any distribution is made under the Plan, shall, where required, withhold shares or cash in the amount necessary to satisfy the tax withholding
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requirements in respect of such distribution, provided that in the option and at the discretion of the Company a Participant may be required to pay to the Company such cash amount as may be necessary to satisfy tax withholding requirements.
(d) Shares of Common Stock delivered pursuant to the terms of the Plan will either be treasury shares of Common Stock acquired prior to or during the term of the Plan, or authorized but unissued shares of Common Stock as determined by the Company. The Directors and officers of the Company are authorized to take such action as may be necessary to provide for the issuance of any and all of the shares which may be necessary to satisfy the Company’s obligations hereunder. The Directors and officers of the Company are authorized to cause said shares to be included or listed on the OTC Bulletin Board, Nasdaq Stock Market or the New York Stock Exchange and any other markets or stock exchanges on which Common Stock may at such time be included or listed. Shares of Common Stock delivered to Participants hereunder in satisfaction of Restricted Stock Unit Awards may be restricted stock under the Securities Act of 1933, as amended, and the certificates for such shares may have a legend imprinted thereon restricting the resale of said shares except in a registered offering or pursuant to an available exemption from registration. The Company may but is under no obligation to register shares of Common Stock issuable pursuant to the Plan.
(g) Payments, or distributions of stock, will be as determined by the Committee and reflected in applicable Award agreements.
| 9. | Adjustments Upon Changes in Capitalization or Corporate Acquisitions. |
In the event of reorganization, recapitalization, stock dividends, stock splits, reverse stock splits, or combination or exchange of shares affecting the number of shares of Common Stock during the term of the Plan, appropriate revision may be made in the discretion of the Committee (i) in any applicable performance goals, and (ii) in the shares awarded to reflect the effect of such event on the interests of the recipients of Restricted Stock Unit Awards under the Plan. In the event of a special, non-recurring distribution of cash, securities or otherwise, with respect to Common Stock, the Committee may pay such special bonus or take such other action with respect to Restricted Stock Unit Awards as it deems just and equitable to reflect such distribution, but in no event shall the total number of shares used under the Plan exceed the number authorized under Section 3 (as may be adjusted pursuant to the first sentence of this Section).
| 10. | Amendment and Termination. |
Either the Board of Directors or the Committee may at any time terminate the Plan, or make such modifications of the Plan as it shall deem advisable.
| 11. | Effectiveness of the Plan. |
The Plan shall become effective upon adoption by the Board of Directors or the Committee and no shareholder approval shall be required.
| 12. | Time of Granting Restricted Stock Unit Awards. |
A Restricted Stock Unit Award under the Plan shall be deemed to be made to a Participant on the date specified by the Committee or its designee, by formal action of the Committee or its designee duly recorded, which may be deemed to be the date that an Award agreement is executed (but in no event prior to the adoption of the Plan by the Board of Directors
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or the Committee and in no event prior to the filing and effectiveness of a registration statement by the Company relating to the Plan with the Securities and Exchange Commission), provided that such Restricted Stock Unit Award is evidenced by a written notice of award duly executed on behalf of the Company.
| 13. | Term of Plan. |
This Plan shall terminate five (5) years after the date on which it is approved and adopted by the Board of Directors or the Committee, and Restricted Stock Unit Awards shall not be granted hereunder after the expiration of such five-year period. Restricted Stock Unit Awards outstanding at the termination of the Plan shall continue in accordance with their terms and shall not be affected by such termination.
| 14. | Change of Control. |
(a) Definition “Change of Control” as used in this Plan shall mean:
(i) The purchase or other acquisition (other than from the Company) by any person, entity or group of persons, within the meaning of Section 13(d) or 14(d) of the Securities Exchange Act of 1934 (“1934 Act”) (excluding, for this purpose, our Chairman of the Board and Chief Executive Officer on the date that this Plan is adopted, the Company or its subsidiaries or any employee benefit plan of the Company or its subsidiaries), of beneficial ownership (within the meaning of Rule 13d-3 of the 1934 Act) of 50% or more of either the then-outstanding shares of Common Stock or the combined voting power of the Company’s then-outstanding voting securities entitled to vote generally in the election of directors; or
(ii) Individuals who, as of the date of the adoption of the Plan, constitute the Board of Directors of the Company (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board of Directors of the Company, provided that any person who becomes a director subsequent to the date hereof whose election, or nomination for election by the Company’s stockholders was approved by a vote of at least a majority of the directors then comprising the Incumbent Board (other than an individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of directors) shall be, for purposes of this paragraph, considered as though such person were a member of the Incumbent Board; or
(iii) Approval by the stockholders of the Company of a reorganization, merger, or consolidation, in each case with respect to which persons who were the stockholders of the Company immediately prior to such reorganization, merger or consolidation would not immediately thereafter own more than 50% of, respectively, the common stock and the combined voting power entitled to vote generally in the election of directors of the reorganized, merged or consolidated corporation’s then-outstanding voting securities, or of a liquidation or dissolution of the Company or of the sale of all or substantially all of the assets of the Company.
(b) Restricted Stock Unit Awards. In the event of a Change of Control, Participants then holding awards of Restricted Stock Units shall be entitled to receive payout of the RSUs (or equivalent value), free of any conditions and as if the specified restricted periods had elapsed and any applicable performance objectives relating thereto had been fully achieved and the Restricted Stock Units shall be deemed to be fully vested; and in this event the holders of Restricted Stock Units shall be entitled to full payment therefor, in Common Stock and in cash, or in such combination of stock and cash as determined by the Committee, payable upon the date of such Change of Control. For the purpose hereof the date of the expiration of the applicable performance period shall be deemed to be the date as of which any Change of Control shall occur.
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| 15. | Governing Law. |
The validity, construction and effect of the Plan and any actions taken or relating to the Plan shall be determined in accordance with the laws of the State of Missouri and applicable Federal law.
| 16. | Severability. |
In the event any provision of this Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of this Plan, and this Plan shall be construed and enforced as if the illegal or invalid provision had not been included.
| 17. | Interpretation and Savings. |
All terms and conditions of this Plan applicable to any non-qualified deferred compensation shall be construed to be in accordance with the non-qualified deferred compensation requirements of Section 409A of the Internal Revenue Code of 1986 (“Code”), including but not limited to its short term deferral exception, and any offending or non-compliant terms shall be amended, voided and reformed to the extent necessary to comply with Section 409A.
| 18. | Specified Employee Determination. |
Notwithstanding anything herein to the contrary, in the event that a Participant is determined to be a specified employee within the meaning of Section 409A of the Code, for purposes of any payment of nonqualified deferred compensation that is subject to Section 409A and is payable on account of a separation from service hereunder, payment(s) shall be made or begin, as applicable, on the first payroll date which is more than six months following the date of separation from service, to the extent required to avoid any adverse tax consequences under Section 409A of the Code.
As Approved by the Board of Directors on April 16, 2012.
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Exhibit 10.2
BAKERS FOOTWEAR GROUP, INC.
2012 INCENTIVE COMPENSATION PLAN
RSU AWARD AGREEMENT
| To: | [ ] (“Participant”) | |
| From: | [Peter A. Edison] | |
| Date: | [ , 2012] (the “Grant Date”) | |
| File: | Bakers Footwear Group, Inc. 2012 Incentive Compensation Plan (the “Plan”) | |
| Re: | Award of Restricted Stock Units under the Plan | |
The Compensation Committee of the Board of Directors (the “Committee”) has granted to the undersigned Participant an award (“Award”) of [ ( )] restricted stock units (“RSUs”). Each RSU shall entitle the Participant to receive one share of Common Stock, par value $0.0001 per share (“Common Stock”) of Bakers Footwear Group, Inc. (the “Company”) under the terms of the Plan upon vesting in the future in accordance with and subject to all other terms and conditions described in this Award Agreement. This Award is subject to all the terms of the Plan, a copy of which has been delivered to the Participant.
The following are terms, conditions and provisions applicable to this Award:
1. RSUs. All of the RSUs shall be subject to the prohibition on the transfer of the RSUs and the obligations to forfeit the RSUs to the Company as set forth in this Award Agreement. The Company shall maintain a book keeping entry or other evidence in respect of each RSU until payout, forfeiture or lapse.
2. Effect of the Plan. The RSUs awarded to the Participant are subject to all of the terms and conditions of the Plan, a copy of which has been provided to the Participant, which terms and conditions are incorporated herein for all purposes, and of this Agreement together with all rules and determinations from time to time issued by the Committee and by the Board pursuant to the Plan. In the event of any inconsistency or conflict between the terms of the Plan and those of this Award, the terms of the Plan shall prevail. The Company hereby reserves the right to amend, modify, restate, supplement or terminate the Plan without the consent of the Participant, so long as such amendment, modification, restatement or supplement shall not materially reduce the rights and benefits available to the Participant hereunder, and this Award shall be subject, without further action by the Company or the Participant, to such amendment, modification, restatement or supplement unless provided otherwise therein. Capitalized terms used but not defined in this Agreement shall have the meanings ascribed to such terms in the Plan.
3. Restrictions. Unless otherwise determined by the Committee, the RSUs shall not be sold, assigned, pledged, exchanged, hypothecated or otherwise transferred except by will or the laws of descent and distribution. Any attempted assignment of any RSUs in violation of this Agreement shall be null and void. The Company shall not be required to honor the transfer of any RSUs that have been sold or otherwise transferred in violation of any of the provisions of this Agreement or the Plan.
4. Forfeiture of RSUs prior to Vesting. Except as determined by the Committee in its discretion pursuant to Section 5(c), if the Participant terminates employment (or capacity as a Director) with the Company prior to the date on which he or she is issued Common Stock in respect of the RSUs pursuant to this Agreement for any reason, then the Participant (or the Participant’s estate, as applicable) shall, for no consideration, forfeit such RSUs with respect to which Common Stock has not yet been delivered.
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5. Vesting Triggers.
(a) Subject to the requirements herein for the Participant to remain continuously employed (or in service as a Director) with the Company for the Minimum Period (as defined below) and until payout of the RSUs, upon the occurrence of the First Vesting Trigger, the Employee shall be eligible for a potential payment with respect to 33 1/3% of the aggregate number of RSUs specified above, which percentage shall increase to 66 2/3% of such number upon the occurrence of the Second Vesting Trigger and 100% of such number upon the occurrence of the Third Vesting Trigger (each such date a “Vesting Date”). Any fractional shares shall be rounded down.
(b) Each of the First Vesting Trigger, Second Vesting Trigger and Third Vesting Trigger are referred to herein as “Vesting Triggers”. The First Vesting Trigger occurs when the Fair Market Value of the Company’s Common Stock closes at or above $2.00 per share for ten consecutive Trading Days. The Second Vesting Trigger occurs when the Fair Market Value of the Company’s Common Stock closes at or above $2.50 per share for ten consecutive Trading Days. The Third Vesting Trigger occurs when the Fair Market Value of the Company’s Common Stock closes at or above $3.00 per share for ten consecutive Trading Days. In addition to the foregoing, the Participant must remain continuously employed (or in service as a Director) with the Company from the Grant Date through the second anniversary of the Grant Date (the “Minimum Period”) prior to the satisfaction of any Vesting Trigger. If any of the Vesting Triggers would have otherwise occurred prior to the end of the Minimum Period but for the elapse of the Minimum Period, then such Vesting Trigger(s) shall be deemed to have been satisfied at the end of such Minimum Period, and the Vesting Date with respect to such Vesting Trigger(s) that were otherwise satisfied during the Minimum Period shall be deemed to be the last day of the Minimum Period. After the lapse of the Minimum Period, the Vesting Date with respect to each Vesting Trigger shall be the last Trading Day in such consecutive ten day period as specified by that Vesting Trigger.
(c) After satisfaction of the Minimum Period and respective Vesting Trigger, the applicable portion of the RSUs shall be paid in Common Stock as described in Section 8; provided, however, no Common Stock shall be issued with respect to such RSUs, and such RSUs shall be forfeited immediately to the Company, without consideration, if the Participant shall not have been continuously employed (or in service as a Director) with the Company until, and including, the date on which such Common Stock is issued. Notwithstanding the foregoing, or Section 4, the Committee may, in its sole and absolute discretion, and to the extent consistent with Section 409A of the Code, vest and immediately issue Common Stock with respect to all or a portion of the RSUs in full, pro rata, or otherwise, or not at all, as it may determine, at such earlier time as the Committee may determine in its sole discretion, including, but not limited to, events of death, disability, other terminations of employment, or otherwise as determined by the Committee.
6. Expiration Date. Any RSUs with respect to which Vesting Trigger(s) have not been satisfied prior to the fifth anniversary from the Grant Date shall lapse and be of no further force or effect. Any RSUs with respect to which Vesting Trigger(s) have been satisfied prior to such fifth anniversary may be paid out after such date, subject to all terms and conditions hereof, including the requirement to remain continuously employed (or serve as a Director) until payment.
7. No Rights. RSUs represent an unsecured promise of the Company to issue shares of Common Stock of the Company as otherwise provided in this Agreement. The RSUs do not represent a current interest in any shares of Common Stock. The Participant shall have no rights of a shareholder of the Company arising from the Award of RSUs except to the extent and with respect to shares of Common Stock that have been issued pursuant to the terms of this Award Agreement.
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8. Issuance of Common Stock.
(a) In accordance with the Vesting Triggers and subject to all terms and conditions set forth in this Agreement and the Plan, the Company shall issue and deliver to the Participant the number of shares of Common Stock equal to the number of RSUs with respect to which the applicable Vesting Trigger has been satisfied (subject to any reductions for tax withholding or otherwise to the extent permitted under the Plan or this Agreement) in accordance with the following schedule, subject to the risks of forfeiture as described in Section 5(c) and provided that the Participant remains continuously employed (or in service as a Director) with the Company on each payment date: Unless otherwise determined by the Committee, the RSUs with respect to which the applicable Vesting Trigger has been satisfied shall be paid out in four equal installments on each of the next four succeeding Payment Dates (defined below) relating to each of the Company’s next four fiscal quarters following the applicable Vesting Date until all of such RSUs with respect to which the applicable Vesting Trigger has been satisfied shall be paid.
(b) Unless otherwise determined by the Committee, the Payment Dates with respect to each fiscal quarter shall be determined by the Committee, and may vary by Participant or Award, based on the next anticipated “open window” next succeeding the end of that fiscal quarter in which the applicable Vesting Date occurs under the Company’s policy on Securities Trades by Company Personnel, provided, however, that a Payment Date with respect to each fiscal quarter may not be more than 150 days after the end of that fiscal quarter and, subject to all of the terms and conditions set forth in this Agreement and the Plan, including continuous employment on the date of payment, full payment of an RSU must occur not later than two calendar years after the Vesting Date with respect to that RSU. For illustrative purposes only, and not in limitation of the foregoing, if the Vesting Date with respect to an RSU occurred on March 1, 2015, the Committee may select a Payment Date in the “open window period” subsequent to the issuance of the Company’s earnings release with respect to that first fiscal quarter of 2015 in which the Vesting Date occurred (e.g., a Payment Date in mid June 2015). The foregoing does not limit the Committee’s discretion set forth in Section 5(c).
(c) Evidence of the issuance of the shares of Common Stock pursuant to this Agreement may be accomplished in such manner as the Company or its authorized representatives shall deem appropriate including, without limitation, electronic registration, book-entry registration or issuance of a certificate or certificates in the name of the Participant or in the name of such other party or parties (including a surviving spouse, heirs, or estate ) as the Company and its authorized representatives shall deem appropriate. Participant must pay or have withheld by the Company an amount of cash equivalent to any applicable par value with respect to any amounts of Common Stock received.
9. Code Section 409A. It is the Company’s and the Participant’s intent that the RSUs under this Award Agreement not be treated as deferred compensation under Code Section 409A (and any regulations or other guidance promulgated thereunder) and that any ambiguities in construction be interpreted in order to effectuate such intent. Notwithstanding any other provision of this Award Agreement, the Committee may (but shall have no obligation to) amend from time to time the provisions hereof to the extent necessary to prevent the application of (or to comply with) Code Section 409A.
10. Community Interest of Spouse. The community interest, if any, of any spouse of the Participant in any of the RSUs shall be subject to all of the terms, conditions and restrictions of this Agreement and the Plan, and shall be forfeited and surrendered to the Company upon the occurrence of any of the events requiring the Participant’s interest in such RSUs to be so forfeited and surrendered pursuant to this Agreement.
11. Binding Effect. This Agreement shall be binding upon and inure to the benefit of any successors to the Company and all persons lawfully claiming under the Participant.
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12. Tax Matters.
(a) The vesting of any RSUs and the issuance of shares of Common Stock pursuant to this Agreement or other payment hereunder shall be subject to the satisfaction of all applicable federal, state and local income and employment tax withholding requirements (the “Required Withholding”). By execution of this Agreement, the Participant shall be deemed to have authorized the Company to withhold from the shares of Common Stock issued the shares of Common Stock necessary to satisfy the Participant’s required minimum statutory withholding taxes, if any. Notwithstanding the foregoing, the Company may require that the Participant satisfy the Participant’s Required Withholding, if any, by any other means the Company, in its sole discretion, considers reasonable. The obligations of the Company under this Agreement shall be conditioned on such satisfaction of the Required Withholding.
(b) The Participant acknowledges that the tax consequences associated with the Award are complex and that the Company has urged the Participant to review with the Participant’s own tax advisors the federal, state, and local tax consequences of this Award. The Participant is relying solely on such advisors and not on any statements or representations of the Company or any of its agents. The Participant understands that the Participant (and not the Company) shall be responsible for the Participant’s own tax liability that may arise as a result of this Agreement.
13. No Right to Continued Service. Nothing in this Agreement shall be deemed to create any limitation or restriction on such rights as the Company otherwise would have to terminate the employment (or capacity as a Director) of the Participant For purposes of this Agreement, employment by a parent or subsidiary of or a successor to the Company shall be considered employment by the Company.
14. Committee Discretion. The Committee shall have authority, subject to the express provisions of the Plan, to construe this Agreement and the Plan, to establish, amend and rescind rules and regulations relating to the Plan, and to make all other determinations in the judgment of the Committee necessary or desirable for the administration of the Plan. The Committee may correct any defect or supply any omission or reconcile any inconsistency in the Plan or in this Agreement in the manner and to the extent it shall deem expedient to carry the Plan into effect. All action by the Committee under the provisions of this paragraph shall be conclusive for all purposes.
15. Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Missouri without reference to its principles of conflict of laws.
16. Entire Agreement. This Agreement sets forth the entire agreement, and supersedes all other agreements and understandings, whether oral or written, by and between the parties relating to the subject matter hereof.
17. Severability. In the event any provision of this Agreement is found to be unlawful, void or unenforceable, the remaining provisions of this Agreement shall remain in force and valid.
THE PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE RESTRICTED STOCK UNITS SUBJECT TO THIS AWARD SHALL VEST AND THE RESTRICTIONS RESULTING IN THE FORFEITURE OF THE RESTRICTED STOCK UNITS SHALL LAPSE, IF AT ALL, ONLY DURING THE PERIOD OF PARTICIPANT’S SERVICE TO THE COMPANY AND THE SATISFACTION OF THE VESTING TRIGGERS OR AS OTHERWISE PROVIDED IN THIS AGREEMENT (NOT THROUGH THE ACT OF BEING GRANTED THE RESTRICTED STOCK UNITS). THE PARTICIPANT FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS
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AGREEMENT OR THE PLAN SHALL CONFER UPON PARTICIPANT ANY RIGHT WITH RESPECT TO FUTURE AWARDS OR CONTINUATION OF PARTICIPANT’S SERVICE TO THE COMPANY. The Participant acknowledges receipt of a copy of the Plan, represents that he or she is familiar with the terms and provisions thereof, and hereby accepts the Restricted Stock Unit Award subject to all of the terms and provisions hereof and thereof. The Participant has reviewed this Agreement and the Plan in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Agreement, and fully understands all provisions of this Agreement and the Plan.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by an authorized officer and the Participant has executed this Agreement, all as of the date first above written.
| BAKERS FOOTWEAR GROUP, INC. | ||
| By: |
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| Title: |
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| PARTICIPANT | ||
| Signed: |
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| Dated: |
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