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Exhibit 10.7
RESTRICTED STOCK RIGHTS
AWARD AGREEMENT
Issued under the SAFECO Long-Term Incentive Plan of 1997
SAFECO Corporation ("SAFECO") hereby grants to ("Employee") the following
restricted stock rights pursuant to, and in accordance with the provisions of,
the SAFECO Long-Term Incentive Plan of 1997 (the "Plan").
1. SHARES SUBJECT TO RIGHTS. SAFECO shall issue to Employee the respective
number of shares of SAFECO common stock (the "Shares") listed in the following
schedule of dates (the "Target Dates") or, at Employee's request, make a payment
in U.S. dollars of an amount equal to the fair market value of the Shares
attributable to the respective Target Date (or any portion thereof) if, and only
if, Employee remains continuously employed by SAFECO or a SAFECO subsidiary, as
defined in the Plan, up to and including the respective Target Date.
SHARES TO BE ISSUED
TARGET DATE ON TARGET DATE
The first Wednesday in:
February 1999
February 2000
February 2001
February 2002
Total
2. TAX WITHHOLDING. As a condition to receiving the Shares attributable to a
Target Date or payment for such Shares, as the case may be, employee must tender
to SAFECO on the respective Target Date an amount sufficient to satisfy all
applicable federal, state and local tax withholding requirements ("Tax
Requirements"). Unless Employee pays SAFECO an amount equal to the Tax
Requirements on the Target Date, SAFECO shall pay the Tax Requirements and
either withhold the amount paid from Employee's next pay check or reduce the
number of Shares issued to Employee by the number of Shares which, on the Target
Date, has a fair market value equal to the Tax Requirements.
3. TERMINATION OF EMPLOYMENT. If Employee voluntarily or involuntarily ceases to
be an employee of SAFECO or a SAFECO subsidiary for any reason other than
Employee's death or disability, Employee shall have no rights to receive any
Shares attributable to Target Dates occurring after the date of termination of
employment. A leave of absence shall constitute a termination of employment
unless the Committee that administers the Plan determines otherwise. Nothing
herein shall be construed or interpreted to confer upon Employee any rights to
continued employment by SAFECO or a SAFECO subsidiary or to interfere in any way
with the right of SAFECO, in its sole discretion, to terminate Employee at any
time.
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4. DEATH OR DISABILITY. In the event Employee's employment by SAFECO or a SAFECO
subsidiary shall terminate by reason of Employee's death or disability (as
disability is defined in Section 22(e)(3) of the Internal Revenue Code of 1986,
as amended, or any successor Code provision), then as soon as practical
following the date of death or the date of determination of disability, SAFECO
shall issue to Employee or the personal representative of Employee's estate, as
the case may be, all of the unissued Shares covered by this Award or, in lieu
thereof, at the request of Employee or the personal representative, make a cash
payment equal to the fair market value of such Shares (or any portion thereof)
at the date of death or the date of determination of disability, as the case may
be. Such Shares shall be issued or payment made without regard to any employment
or other service requirement stated in this Award Agreement.
5. ADDITIONAL COMPENSATION PAYMENTS. So long as Employee remains in the
continuous employ of SAFECO or a SAFECO subsidiary, then, with respect to the
Shares that are to be issued on each Target Date hereunder, SAFECO shall pay to
Employee during the period commencing with the date hereof and ending on such
Target Date, as additional compensation, an amount of cash equal to the
dividends that would have been payable to Employee during such period if
Employee had owned such Shares. Such amounts shall be paid as near in time as
reasonably practical to the applicable dividend payment dates. Upon termination
of employment, Employee's right to receive dividend equivalents under this
paragraph shall immediately cease; provided; however, that if the termination of
employment was due to Employee's death or disability (as defined in paragraph 4
above) and occurred after an ex-dividend date but prior to payment of the
dividend, Employee or the personal representative of Employee's estate shall be
entitled to payment under this paragraph of an amount equivalent to such
dividend.
6. RIGHTS NOT TRANSFERABLE. The rights granted to Employee hereunder shall not
be subject to execution, attachment or similar process. Except to the extent the
Plan or the Compensation Committee may permit, the rights evidenced by this
Award Agreement may not be assigned, pledged or transferred in any manner, by
operation of law or otherwise, except by will or by the laws of descent and
distribution. During Employee's lifetime, only Employee or Employee's guardian
may exercise any right granted hereunder.
7. FORFEITURE.
(a) If, at any time within (i) one year after the issuance of Shares or
the cash settlement of rights granted by this Award or (ii) one year after
termination of employment, whichever is the later (the "Restricted
Period"), Employee engages in any activity harmful to SAFECO's interests
or which is in competition with any of SAFECO's operations, then
Employee's rights under this Award Agreement shall terminate effective as
of the date that Employee commences such activity (unless terminated
sooner by operation of another term or condition of this Award), and the
value on the issuance date of the Shares issued during the Restricted
Period (or the cash equivalent paid in lieu thereof) shall be immediately
payable to SAFECO.
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(b) Such harmful or competitive activities include, without limitation,
(i) engaging in conduct related to Employee's job responsibilities for
which either criminal or civil penalties may be sought; (ii) accepting
employment with or serving as a consultant, advisor or in any other
capacity to any party which is in competition with any member or members
of the SAFECO group of companies in any of their lines of business; (iii)
disclosing or misusing any confidential information concerning any of the
SAFECO companies; and (iv) participating in a hostile attempt to acquire
control of SAFECO.
(c) SAFECO shall have the right to reduce payment of any amounts owed to
Employee (for wages, fringe benefits, unused vacation or any other reason
except as may be prohibited by law) to the extent any amounts are owed to
SAFECO by Employee under the foregoing forfeiture provisions.
8. RIGHTS AS STOCKHOLDER. Neither Employee, nor Employee's personal
representative, heir, legatee or distributee, shall be deemed to be a holder of,
or to have any rights with respect to, any Shares subject to the rights granted
hereunder until such Shares are issued.
9. NO SEPARATE FUND. SAFECO has not set aside or segregated any assets or
established any separate account or fund to insure payment of its obligations
hereunder.
10. PROVISIONS OF THE SAFECO LONG-TERM INCENTIVE PLAN OF 1997. This Award is
subject to all of the provisions of the SAFECO Long-Term Incentive Plan of 1997,
as it may be amended from time to time and, to the extent provided in the Plan,
to all constructions, interpretations, rules and guidelines which the
Compensation Committee may adopt from time to time pursuant to or in connection
with the Plan. Capitalized terms not otherwise defined in these Standard
Provisions shall have the meanings assigned to them in the Plan.
11. PLAN DOCUMENT. By signing in the space provided below to acknowledge
acceptance of this Award, Employee further acknowledges that Employee has
received a plan summary which includes the text of the Plan and has been
afforded an opportunity to ask any questions that he or she may have regarding
the Plan or the rights granted hereunder.
Dated this 4th day of February, 1998.
SAFECO CORPORATION
By:
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Xxxxx X. Xxxxxx, Chairman and CEO
Accepted:
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Employee
Date:
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