HOMEBASE, INC. EQUITY UNIT AGREEMENT
This Equity Unit Agreement ("Agreement") is made and entered into as of
February 8, 1999 by and between HomeBase, Inc., a Delaware corporation (the
Company"), and Xxxxxx X. Xxxxxxxxx ("Executive").
WHEREAS, Executive is a valued employee of the Company; and
WHEREAS, the Executive Compensation Committee of the Board of Directors of
the Company ("ECC") has approved the grant to Executive of the number of Units
indicated below, on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing recitals and the
covenants set forth herein, the parties hereto agree as follows:
1. Grant of Units; Certain Terms and Conditions. The Company hereby grants
to Executive, and Executive hereby accepts, 100,000 Units, subject to the
vesting schedule indicated below and all of the terms and conditions set forth
in this Agreement.
Number of Units Vesting Date
50,000 January 27, 2001
25,000 January 26, 2002
25,000 January 25, 2003
Notwithstanding any other provision hereof, if a Change of Control Event (as
defined in Annex A hereto) occurs, all of Executives' Units shall become fully
vested and nonforfeitable.
2. Payment of Vested Units. A cash payment in respect of vested Units shall
be made to Executive not later than the 15th of March following the date such
Unit vests and shall equal the applicable number of vested Units multiplied by
the lesser of (a) $12.00 or (b) the greater of (i) $6.00 or (ii) the average
closing price of the Company's common stock (as reported in the Wall Street
Journal) for the first five trading days immediately following the Company's
annual earnings release in respect of the Company's fiscal years ending in
January 2001, 2002, or 2003, as the case may be. Notwithstanding the foregoing,
if Units vest by reason of a Change of Control Event, a cash payment in respect
of such Units shall be made to Executive as soon as practicable after the Change
of Control Event and shall equal the applicable number of Units multiplied by
the lesser of (x) $12.00, or (y) the greater of (i) $6.00 or (ii) the tender
offer price per common share of Company Stock in the case of a cash transaction
or the average closing price for the Company (as reported in the Wall Street
Journal) for the five trading days immediately preceding the Change of Control
Event date in the case of a noncash transaction.
3. Forfeitures. If Executive's employment with the Company terminates for
any reason, any Units remaining unvested as of the date of employment
termination shall be forfeited.
4. Adjustment to Common Stock of Company. In the event of any stock split,
stock dividend, recapitalization, reorganization, merger, consolidation,
combination, exchange of shares, liquidation, spin-off or other similar change
in capitalization or event, or any distribution to holders of Common Stock other
than a normal cash dividend, the number of Units and/or the payment price for
Units described in Section 2 hereof shall be appropriately adjusted by the
Company (or substituted awards may be made, if applicable) to the extent the
Board shall determine, in good faith, that such an adjustment (or substitution)
is necessary and appropriate.
5. Transferability of Units. Neither the Units nor any interest therein may
be sold, assigned, conveyed, gifted, pledged, hypothecated or otherwise
transferred in any manner.
6. Payment of Withholding Tax. If the Company is obligated to withhold an
amount on account of any federal, state or local tax imposed as a result of the
redemption of the Units, including, without limitation, any federal, state or
other income tax, or any F.I.C.A., state disability insurance tax or other
employment tax, then the Company shall deduct such amount from the amount
otherwise payable to Executive upon payment in respect of the Units.
7. Employment Rights. No provision of this Agreement or of the Units
granted hereunder shall (a)confer upon Executive the right to continue in the
employ of the Company, (b)affect the right of the Company to terminate the
employment of Executive, with or without cause, or (c)confer upon Executive any
right to participate in any employee welfare or benefit plan or other program of
the Company. Executive hereby acknowledges and agrees that the Company may
terminate the employment of Executive at any time and for any reason, or for no
reason, unless Executive and the Company are parties to a written employment
agreement that expressly provides otherwise.
8. Governing Law. This Agreement and the Units granted hereunder shall be
governed by and construed and enforced in accordance with the laws of the State
of Delaware.
IN WITNESS WHEREOF, the Company and Executive have duly executed this
Agreement as of the date just noted above.
HomeBase, Inc.
By___________________________________
Xxxxx X. Xxxxxxx
Chief Executive Officer and President
_____________________________________
Xxxxxx X.Xxxxxxxxx
ANNEX A
DEFINITION OF CHANGE OF CONTROL EVENT
For the purpose of the Plan, a "Change of Control Event" shall mean:
(a) The acquisition by an individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")(a "Person") of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of
either (i) the then-outstanding shares of common stock of the Company (the
"Outstanding Company Common Stock") or (ii) the combined voting power of the
then-outstanding voting securities of the Company entitled to vote generally in
the election of directors (the "Outstanding Company Voting Securities");
provided, however, that for purposes of this subsection (a), the following
acquisitions shall not constitute a Change of Control Event: (i) any acquisition
directly from the Company, (ii) any acquisition by the Company, (iii) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company, or (iv)
any acquisition by any corporation pursuant to a transaction which satisfies the
criteria set forth in clauses (i), (ii) and (iii) of subsection (c) of this
definition; or
(b) Individuals who, as of the date hereof, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a director subsequently
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
when comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board (except that this proviso shall
not apply to any individual whose initial assumption of office as a director
occurs as a result of an actual or threatened election contest with respect to
the election or removal of directors or other actual or threatened solicitation
of proxies or consents by or on behalf of a Person other than the Board); or
(c) Consummation of a reorganization, merger or consolidation involving the
Company or a sale or other disposition of all or substantially all of the assets
of the Company (a "Business Combination"), in each case, unless, immediately
following such Business Combination, (i) all or substantially all of the
individuals and entities who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding Company Voting Securities
immediately prior to such Business Combination beneficially own, directly or
indirectly, more than 60% of, respectively, the then-outstanding shares of
common stock and the combined voting power of the then-outstanding voting
securities entitled to vote generally in the election of directors, of the
corporation resulting from such Business Combination (which as used in section
(c) of this definition shall include, without limitation, a corporation which as
a result of such transaction owns the Company or all or substantially all of the
Company's assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately prior to such
Business Combination, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities, as the case may be, (ii) no Person (excluding any
corporation resulting from such Business Combination or any employee benefit
plan (or related trust) of the Company or such corporation resulting from such
Business Combination) beneficially owns, directly or indirectly, 20% or more of,
respectively, the then outstanding shares of common stock of the corporation
resulting from such Business Combination, or the combined voting power of the
then-outstanding voting securities of such corporation and (iii) at least half
of the members of the board of directors of the corporation resulting from such
Business Combination were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of the Board, providing for
such Business Combination; or
(d) Approval by the stockholders of the Company of a complete liquidation
or dissolution of the Company.
