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): May 10, 2018

 

 

Dorman Products, Inc.

(Exact name of Registrant as Specified in Charter)

 

 

 

Pennsylvania   000-18914   23-2078856

(State or Other Jurisdiction

of Incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

3400 East Walnut Street, Colmar, Pennsylvania 18915

(Address of Principal Executive Offices) (Zip Code)

Registrant’s telephone number, including area code: (215) 997-1800

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

 

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:

 

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))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 


Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On May 10, 2018, at the Dorman Products, Inc. (the “Company”) 2018 Annual Meeting of Shareholders, shareholders approved the Dorman Products, Inc. 2018 Stock Option and Stock Incentive Plan (the “2018 Plan”). A summary of the material terms of the 2018 Plan is incorporated herein by reference from pages 55-64 of the Company’s proxy statement for the 2018 Annual Meeting of Shareholders, as filed with the SEC on March 29, 2018 (the “2018 Proxy Statement”). The summary of the 2018 Plan included in the 2018 Proxy Statement is not intended to be complete and is qualified in its entirety by reference to the 2018 Plan, which is attached as Exhibit A to the 2018 Proxy Statement, and is incorporated by reference herein.

Also on May 10, 2018, the Compensation Committee of the Board of Directors of the Company approved forms of award agreements to be used for the grant of stock options, restricted stock (both time and performance-based) and restricted stock units (both time and performance-based) to directors and executive officers under the 2018 Plan (the “Award Agreements”). The Award Agreements were adopted in order to facilitate the Company’s grant of equity awards with a variety of terms and vesting criteria as permitted by the 2018 Plan. The forms of Award Agreements are attached hereto as Exhibits 10.1, 10.2. 10.3, 10.4, 10.5 and 10.6.

The forms of Award Agreements include provisions that provide the following:

 

    The exercise price of an option may be paid in any combination of: cash; by check payable to the order of the Company; by the delivery of shares of common stock then owned by the optionee (or by attestation of such ownership); or via cashless exercise.

 

    If a participant’s employment is terminated, outstanding vested and unvested awards will be subject to the following treatment:

 

Reason for Termination

  

Effect on Awards

Death or Disability   

•   All unvested restricted stock awards and restricted stock units that vest in whole or in part based on performance will vest pro rata at the end of the performance period to the extent the performance target(s) for the performance period are met.

 

•   All other unvested restricted stock awards and restricted stock units will become vested.

 

•   Stock options will be exercisable for one year unless the award has an earlier expiration date.

For Cause Termination   

•   All outstanding awards, whether or not vested, earned or exercisable, will be forfeited.

Other Termination Events   

•   Unvested, unearned or unexercisable awards will be forfeited.

 

•   Exercisable stock options will be exercisable for a 30-day period unless the award has an earlier expiration date.

 

    Upon a change in control, as defined in the 2018 Plan, all outstanding options will automatically accelerate and become fully exercisable and the restrictions and conditions on outstanding restricted stock and restricted stock units will immediately lapse (with performance-based restricted stock awards and performance-based restricted stock unit awards vesting at maximum performance level). In addition the stock option award agreements authorize the Compensation Committee, in the event of a change in control, to take such actions with respect to the applicable option as it deems appropriate pursuant to the 2018 Plan.

 

    Participants holding restricted shares will have all the rights of a shareholder with respect to such shares, including, but not limited to, the right to vote such shares and receive all dividends and other distributions paid with respect to them. Cash dividends declared or paid on restricted shares will be deferred until the lapsing of any restrictions imposed on such restricted shares.


    Restricted stock units will be granted with dividend equivalent rights. Dividend equivalents will vest and be paid only if and to the extent the underlying restricted stock units vest and are paid. Dividend equivalents will be payable in cash.

 

    The form of performance-based restricted stock award agreement and the form of performance-based restricted stock unit award agreement each set forth a list of performance criteria that may be utilized by the Compensation Committee in connection with issuing performance-based awards.

The foregoing is only a summary of certain terms and conditions of the Award Agreements and is qualified in its entirety by reference to such forms, copies of which are attached hereto as Exhibits 10.1, 10.2. 10.3, 10.4, 10.5 and 10.6 and incorporated herein by reference.

Item 5.07 Submission of Matters to a Vote of Security Holders .

The Company’s 2018 Annual Meeting of Shareholders (“Annual Meeting”) was held on May 10, 2018. During the Annual Meeting, shareholders were asked to consider and vote upon four proposals: (1) to elect seven directors, each to serve for a term of one year to expire at the next annual meeting of shareholders and until his or her successor has been elected and qualified or until his or her earlier death, resignation or removal; (2) to approve, on an advisory basis, the compensation of the Company’s named executive officers; (3) to approve the Dorman Products, Inc. 2018 Stock Option and Stock Incentive Plan; and (4) to ratify KPMG LLP as the Company’s independent registered public accounting firm for the 2018 fiscal year.

On the record date of March 9, 2018, there were 33,599,819 shares of the Company’s common stock issued and outstanding and entitled to vote at the Annual Meeting. For each proposal, the results of the shareholder voting were as follows:

 

  1. The following nominees were each elected to serve as director for a term of one year to expire at the next annual meeting of shareholders and until his or her successor has been elected and qualified or until his or her earlier death, resignation or removal based upon the following votes:

 

Nominee

 

Votes in Favor

 

Votes Against

 

Abstain

 

Broker Non-Votes

Steven L. Berman

  29,587,152   302,363   4,053   1,681,079

Mathias J. Barton

  29,653,790   235,499   4,279   1,681,079

John J. Gavin

  29,522,634   367,281   3,653   1,681,079

Paul R. Lederer

  29,378,623   511,066   3,879   1,681,079

Richard T. Riley

  29,541,795   347,870   3,903   1,681,079

Kelly A. Romano

  29,699,900   189,581   4,087   1,681,079

G. Michael Stakias

  29,534,060   355,654   3,854   1,681,079

 

  2. The compensation of the Company’s named executive officers, as described in the proxy statement, was approved on an advisory basis based upon the following votes:

 

Votes in Favor

 

Votes Against

 

Abstain

 

Broker Non-Votes

29,748,211

  90,450   54,907   1,681,079

 

  3. The Dorman Products, Inc. 2018 Stock Option and Stock Incentive Plan was approved based upon the following votes:

 

Votes in Favor

 

Votes Against

 

Abstain

 

Broker Non-Votes

29,079,368

  760,719   53,481   1,681,079


  4. KPMG LLP was ratified as the Company’s independent registered public accounting firm for the 2018 fiscal year based upon the following votes:

 

Votes in Favor

 

Votes Against

 

Abstain

31,139,621

  391,302   43,724

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

 

Exhibit

Number

  

Description

10.1      Form of Non-Qualified Stock Option Award for grants under the Dorman Products, Inc. 2018 Stock Option and Stock Incentive Plan
10.2      Form of Incentive Stock Option Award for grants under the Dorman Products, Inc. 2018 Stock Option and Stock Incentive Plan
10.3      Form of Restricted Stock Award for grants under the Dorman Products, Inc. 2018 Stock Option and Stock Incentive Plan
10.4    Form of Performance Restricted Stock Award for grants under the Dorman Products, Inc. 2018 Stock Option and Stock Incentive Plan
10.5    Form of Restricted Stock Unit Award for grants under the Dorman Products, Inc. 2018 Stock Option and Stock Incentive Plan
10.6    Form of Performance Restricted Stock Unit Award for grants under the Dorman Products, Inc. 2018 Stock Option and Stock Incentive Plan


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.

 

    DORMAN PRODUCTS, INC.
Date: May 14, 2018     By:   /s/ Kevin M. Olsen
      Name: Kevin M. Olsen
      Title: Executive Vice President and Chief Financial Officer

Exhibit 10.1

DORMAN PRODUCTS, INC.

NON-QUALIFIED STOCK OPTION AWARD

This is a Non-Qualified Stock Option Award (this “Award”) dated [                        ] (the “Grant Date”) from Dorman Products, Inc. (the “Company”) to [                        ] (the “Optionee”).

1. Grant of Option . Subject to the terms and conditions set forth herein and in the Dorman Products, Inc. 2018 Stock Option and Stock Incentive Plan (the “Plan”), the Company hereby grants to the Optionee a non-qualified stock option to purchase [            ] shares of Common Stock (the “Option”) at a price of $[        ] per Share (the “Exercise Price”) effective as of the Grant Date.

2. Vesting Dates .

(a) The Option shall vest and become exercisable as follows:

 

Vesting Date:

   Percent of Award Vested & Exercisable:
  
  
  

(b) In addition, upon a Change in Control, 100% of the unvested portion of the Option shall vest and become exercisable.

(c) In addition, upon the Optionee’s termination of employment for any of the following reasons, the unvested portion of the Option shall vest and become exercisable as indicated:

(i) 100% as of the date of Optionee’s death; or

(ii) 100% as of the date of Optionee’s termination of employment due to Disability.

Except as provided above, upon the termination of employment of the Optionee, any unvested portion of the Option will immediately and automatically, without any action on the part of the Company, be forfeited and cancelled.

 

1


3. Termination of the Option .

(a) The Option shall remain exercisable until the [    ] anniversary of the Date of Grant (the “Expiration Date”), unless it is terminated at an earlier date pursuant to the provisions of this Award or the Plan.

(b) In the event of termination of the Optionee’s employment, the Option, to the extent vested as of the date thereof (including pursuant to Paragraphs 2(b) or 2(c) above) shall terminate immediately after the first to occur of: (i) the Expiration Date; (ii) one year after termination of the Optionee’s employment on account of death or Disability; (iii) 30 days after termination of the Optionee’s employment for any reason other than on account of death, Disability or for Cause; and (iv) immediately upon termination of the Optionee’s employment for Cause.

4. Automatic Exercise . If the Option remains unexercised, in whole or in part, immediately before the time at which the Option is scheduled to expire in accordance with the terms and conditions of this Award and the Plan, the Option shall be deemed automatically exercised in accordance with Paragraph 7(i)(ii) of the Plan immediately before the time at which the Option is scheduled to expire, if the Option satisfies the following conditions:

(a) The Option is covered by a then current registration statement under the 1933 Act.

(b) The last reported sale price of a Share on the principal exchange on which Shares are listed on the date of determination, or if such date is not a trading day, the last preceding trading day, exceeds the Exercise Price by such amount as may be determined by the Committee or its delegate from time to time. Absent a contrary determination, such excess per Share shall be $0.01.

(c) The Optionee’s employment has not been terminated by the Company for Cause, and, immediately before the time at which such Option is scheduled to expire, there is no basis for a termination of employment by the Company for Cause.

An Option subject to this Section 4 shall be exercised via cashless exercise, such that subject to the other terms and conditions of the Plan, following the date of exercise, the Company shall deliver to the Optionee Shares having a Fair Market Value, on the exercise date, equal to the excess, if any, of (A) the Fair Market Value of the Shares issued pursuant to the exercise of the Option, over (B) the sum of (1) the aggregate Exercise Price for the Shares issued pursuant to the exercise of the Option, plus (2) the applicable tax withholding amounts (as determined pursuant to Paragraph 15 of the Plan) for such exercise; provided that in connection with such cashless exercise that would not result in the issuance of a whole number of Shares, the Company shall pay cash in lieu of any fractional Share.

5. Method of Exercise . The Optionee may exercise the Option by providing written notice to the Company stating the election to exercise the Option. Such written notice shall be signed by the Optionee and shall be hand delivered, e-mailed, tele-copied or mailed first class postage prepaid to the attention of the Secretary or Assistant Secretary of the Company or such other person as may be designated by the Company. Each such exercise shall be irrevocable when given. Each notice of exercise must (i) specify the Option being exercised; and (ii) if applicable, include a statement of preference (which shall be binding on and irrevocable by the Optionee but shall not be binding on the Committee) as to the manner in which payment of the Exercise Price to the Company shall be made.

 

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6. Payment for Shares . Full payment for Shares purchased upon the exercise of an Option may be made in any combination of: (i) cash, (ii) by check payable to the order of the Company; (iii) by the delivery of shares of Common Stock then owned by the Optionee (or by attestation of such ownership) in accordance with Paragraph 7(g)(iii) of the Plan; or (iii) via cashless exercise in accordance with Paragraph 7(g)(iv) of the Plan.

7. Change in Control . In the event of a Change in Control, the Committee may take such actions with respect to the Option as it deems appropriate pursuant to the Plan.

8. Nontransferability of Option . The Option may not be transferred or assigned by the Optionee otherwise than by will or the laws of descent and distribution or be exercised during the Optionee’s lifetime other than by the Optionee or for the Optionee’s benefit by the Optionee’s attorney-in-fact or guardian; provided, however, that the Committee may, in its discretion, permit the Option to be transferred, in whole or in part, to one or more transferees and exercised by any such transferee if such transferee is a Family Member with respect to the Optionee. Any attempt at assignment, transfer, pledge or disposition of the Option contrary to the provisions hereof or the levy of any execution, attachment or similar process upon the Option shall be null and void and without effect. Any exercise of the Option by a person other than the Optionee shall be accompanied by appropriate proofs of the right of such person to exercise the Option.

9. Securities Laws . The Committee may from time to time impose any conditions on the exercise of the Option as it deems necessary or appropriate to comply with the then-existing requirements of the 1933 Act or the 1934 Act, including Rule 16b-3 (or any similar rule) of the Securities and Exchange Commission. If the listing, registration or qualification of Shares issuable on the exercise of the Option upon any securities exchange or under any federal or state law, or the consent or approval of any governmental regulatory body is necessary as a condition of or in connection with the purchase of such Shares, the Company shall not be obligated to issue or deliver the certificates representing the Shares otherwise issuable on the exercise of the Option unless and until such listing, registration, qualification, consent or approval shall have been effected or obtained. If registration is considered unnecessary by the Company or its counsel, the Company may cause a legend to be placed on such Shares calling attention to the fact that they have been acquired for investment and have not been registered.

10. Issuance of Shares . Subject to the provisions of Section 9 and 11 hereof, a certificate for the Shares issuable on the exercise of the Option shall be delivered to the Optionee or to the Optionee’s personal representative, heir or legatee as soon as administratively practicable following exercise and payment for the Shares. The Company may satisfy its obligation to deliver Shares following the exercise of the Option by arranging for the recording of Optionee’s ownership of Shares issuable on the exercise of the Option on a book entry recordkeeping system maintained on behalf of the Company. Only whole Shares shall be issuable upon exercise of the Option.

 

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11. Rights Prior to Exercise . The Optionee shall not have any right as a shareholder with respect to any Shares subject to this Option until the Option shall have been exercised in accordance with the terms of the Plan and the Award and the Company shall have delivered the Shares. In the event that the Optionee’s termination of employment by the Company is for Cause, upon a determination by the Committee, the Optionee shall automatically forfeit all Shares otherwise subject to delivery upon exercise of an Option but for which the Company has not yet delivered the Shares, upon refund by the Company of the Exercise Price (to the extent paid).

12. Status of Option; Interpretation . The Option is intended to be a non-qualified stock option. Accordingly, it is intended that the transfer of property pursuant to the exercise of the Option be subject to federal income tax in accordance with section 83 of the Code. The Option is not intended to qualify as an incentive stock option within the meaning of section 422 of the Code. The interpretation and construction of any provision of this Option or the Plan made by the Committee shall be final and conclusive and, insofar as possible, shall be consistent with the intention expressed in this Section 12.

13. Option Not to Affect Employment . The Option granted hereunder shall not confer upon the Optionee any right to continue in service as an employee, officer or director of the Company or any subsidiary of the Company.

14. Miscellaneous .

(a) The address for the Optionee to which notice, demands and other communications to be given or delivered under or by reason of the provisions hereof shall be the address contained in the Company’s personnel records, or such other address as the Optionee may provide to the Company by written notice.

(b) This Award may be executed in one or more counterparts all of which taken together will constitute one and the same instrument.

(c) The validity, performance, construction and effect of this Award shall be governed by the laws of the Commonwealth of Pennsylvania, without giving effect to principles of conflicts of law.

(d) The Optionee hereby irrevocably and unconditionally consents to submit to the exclusive jurisdiction of the courts of the Commonwealth of Pennsylvania and of the United States of America, in each case located in Philadelphia, Pennsylvania, for any actions, suits or proceedings arising out of or relating to this Award and the transactions contemplated hereby (“Litigation”) and agrees not to commence any Litigation except in any such court, and further agrees that service of process, summons, notice or document by U.S. registered mail to his respective address shall be effective service of process for any Litigation brought against him in any such court. Each party hereby irrevocably and unconditionally waives any objection to the laying of venue of any Litigation in the courts of the Commonwealth of Pennsylvania or of the United States of America, in each case located in Philadelphia, Pennsylvania, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any Litigation brought in any such court has been brought in an inconvenient forum.

 

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15. Withholding of Taxes . Whenever the Company proposes or is required to deliver or transfer Shares in connection with the exercise of the Option, the Company shall have the right to (a) withhold Shares subject to the Optionee’s exercise of the Option as provided in Paragraphs 7(g)(iv) and 15 of the Plan, (b) require the Optionee to remit to the Company an amount sufficient to satisfy any federal, state and/or local withholding tax requirements prior to the delivery or transfer of any certificate or certificates for such Shares or (c) take whatever action it deems necessary to protect its interests with respect to tax liabilities.

16. Repayment . This Option shall be subject to any repayment or clawback policy of the Company that is currently in effect or that is hereinafter adopted.

17. Incorporation of Plan Terms . This Award is subject to the terms and conditions of the Plan. Such terms and conditions of the Plan are incorporated into and made a part of this Award by reference. In the event of any conflicts between the provisions of this Award and the terms of the Plan, the terms of the Plan will control. In the event, however, of any conflict between the provisions of this Award or the Plan and the provisions of an employment or change-in-control agreement between the Company and the Optionee, the provisions of the latter shall prevail, to the extent consistent with the Plan. Capitalized terms used but not defined in this Award shall have the meanings set forth in the Plan unless the context clearly requires an alternative meaning.

IN WITNESS WHEREOF, the Company has granted this Award on the day and year first above written.

 

DORMAN PRODUCTS, INC.

 

BY:  

 

 

I hereby acknowledge receipt of a copy of the forgoing Award and the Plan and, having read them hereby, signify my understanding of, and my agreement with, their terms and conditions. I accept this Option in full satisfaction of any previously written or verbal promises made to me by the Company with respect to option grants.

 

 

    

 

(Name)      (Date)

 

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Exhibit 10.2

DORMAN PRODUCTS, INC.

INCENTIVE STOCK OPTION AWARD

This is an Incentive Stock Option Award (this “Award”) dated [                    ] (the “Grant Date”) from Dorman Products, Inc. (the “Company”) to [            ] (the “Optionee”).

1. Grant of Option . Subject to the terms and conditions set forth herein and in the Dorman Products, Inc. 2018 Stock Option and Stock Incentive Plan (the “Plan”), the Company hereby grants to the Optionee an incentive stock option to purchase [            ] shares of Common Stock (the “Option”) at a price of $[            ] per Share (the “Exercise Price”) effective as of the Grant Date.

2. Vesting Dates .

(a) The Option shall vest and become exercisable as follows:

 

Vesting Date:

   Percent of Award Vested & Exercisable:  
  
  
  

(b) In addition, upon a Change in Control, 100% of the unvested portion of the Option shall vest and become exercisable.

(c) In addition, upon the Optionee’s termination of employment for any of the following reasons, the unvested portion of the Option shall vest and become exercisable as indicated:

(i) 100% as of the date of Optionee’s death; or

(ii) 100% as of the date of Optionee’s termination of employment due to Disability.

Except as provided above, upon the termination of employment of the Optionee, any unvested portion of the Option will immediately and automatically, without any action on the part of the Company, be forfeited and cancelled.

 

1


3. Termination of the Option .

(a) The Option shall remain exercisable until the [ ] anniversary of the Date of Grant (the “Expiration Date”), unless it is terminated at an earlier date pursuant to the provisions of this Award or the Plan.

(b) In the event of termination of the Optionee’s employment, the Option, to the extent vested as of the date thereof (including pursuant to Paragraphs 2(b) or 2(c) above) shall terminate immediately after the first to occur of: (i) the Expiration Date; (ii) one year after termination of the Optionee’s employment on account of death or Disability; (iii) 30 days after termination of the Optionee’s employment for any reason other than on account of death, Disability or for Cause; and (iv) immediately upon termination of the Optionee’s employment for Cause.

4. Automatic Exercise . If the Option remains unexercised, in whole or in part, immediately before the time at which the Option is scheduled to expire in accordance with the terms and conditions of this Award and the Plan, the Option shall be deemed automatically exercised in accordance with Paragraph 7(i)(ii) of the Plan immediately before the time at which the Option is scheduled to expire, if the Option satisfies the following conditions:

(a) The Option is covered by a then current registration statement under the 1933 Act.

(b) The last reported sale price of a Share on the principal exchange on which Shares are listed on the date of determination, or if such date is not a trading day, the last preceding trading day, exceeds the Exercise Price by such amount as may be determined by the Committee or its delegate from time to time. Absent a contrary determination, such excess per Share shall be $0.01.

(c) The Optionee’s employment has not been terminated by the Company for Cause, and, immediately before the time at which such Option is scheduled to expire, there is no basis for a termination of employment by the Company for Cause.

An Option subject to this Section 4 shall be exercised via cashless exercise, such that subject to the other terms and conditions of the Plan, following the date of exercise, the Company shall deliver to the Optionee Shares having a Fair Market Value on the exercise date, equal to the excess, if any, of (A) the Fair Market Value of the Shares issued pursuant to the exercise of the Option, over (B) the sum of (1) the aggregate Exercise Price for the Shares issued pursuant to the exercise of the Option, plus (2) the applicable tax withholding amounts (as determined pursuant to Paragraph 15 of the Plan) for such exercise; provided that in connection with such cashless exercise that would not result in the issuance of a whole number of Shares, the Company shall pay cash in lieu of any fractional Share.

5. Method of Exercise . The Optionee may exercise the Option by providing written notice to the Company stating the election to exercise the Option. Such written notice shall be signed by the Optionee and shall be hand delivered, e-mailed, tele-copied or mailed first class postage prepaid to the attention of the Secretary or Assistant Secretary of the Company or such other person as may be designated by the Company. Each such exercise shall be irrevocable when given. Each notice of exercise must (i) specify the Option being exercised; and (ii) if applicable, include a statement of preference (which shall be binding on and irrevocable by the Optionee but shall not be binding on the Committee) as to the manner in which payment of the Exercise Price to the Company shall be made.

 

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6. Payment for Shares . Full payment for Shares purchased upon the exercise of an Option may be made in any combination of: (i) cash, (ii) by check payable to the order of the Company; (iii) by the delivery of shares of Common Stock then owned by the Optionee (or by attestation of such ownership) in accordance with Paragraph 7(g)(iii) of the Plan; or (iii) via cashless exercise in accordance with Paragraph 7(g)(iv) of the Plan.

7. Change in Control . In the event of a Change in Control, the Committee may take such actions with respect to the Option as it deems appropriate pursuant to the Plan.

8. Nontransferability of Option . The Option may not be transferred or assigned by the Optionee otherwise than by will or the laws of descent and distribution or be exercised during the Optionee’s lifetime other than by the Optionee or for the Optionee’s benefit by the Optionee’s attorney-in-fact or guardian. Any attempt at assignment, transfer, pledge or disposition of the Option contrary to the provisions hereof or the levy of any execution, attachment or similar process upon the Option shall be null and void and without effect. Any exercise of the Option by a person other than the Optionee shall be accompanied by appropriate proofs of the right of such person to exercise the Option.

9. Securities Laws . The Committee may from time to time impose any conditions on the exercise of the Option as it deems necessary or appropriate to comply with the then-existing requirements of the 1933 Act or the 1934 Act, including Rule 16b-3 (or any similar rule) of the Securities and Exchange Commission. If the listing, registration or qualification of Shares issuable on the exercise of the Option upon any securities exchange or under any federal or state law, or the consent or approval of any governmental regulatory body is necessary as a condition of or in connection with the purchase of such Shares, the Company shall not be obligated to issue or deliver the certificates representing the Shares otherwise issuable on the exercise of the Option unless and until such listing, registration, qualification, consent or approval shall have been effected or obtained. If registration is considered unnecessary by the Company or its counsel, the Company may cause a legend to be placed on such Shares calling attention to the fact that they have been acquired for investment and have not been registered.

10. Issuance of Shares . Subject to the provisions of Section 9 and 11 hereof, a certificate for the Shares issuable on the exercise of the Option shall be delivered to the Optionee or to the Optionee’s personal representative, heir or legatee as soon as administratively practicable following exercise and payment for the Shares. The Company may satisfy its obligation to deliver Shares following the exercise of the Option by arranging for the recording of Optionee’s ownership of Shares issuable on the exercise of the Option on a book entry recordkeeping system maintained on behalf of the Company. Only whole Shares shall be issuable upon exercise of the Option.

 

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11. Rights Prior to Exercise . The Optionee shall not have any right as a shareholder with respect to any Shares subject to this Option until the Option shall have been exercised in accordance with the terms of the Plan and the Award and the Company shall have delivered the Shares. In the event that the Optionee’s termination of employment by the Company is for Cause, upon a determination by the Committee, the Optionee shall automatically forfeit all Shares otherwise subject to delivery upon exercise of an Option but for which the Company has not yet delivered the Shares, upon refund by the Company of the Exercise Price (to the extent paid).

12. Status of Option; Interpretation . The Option is intended to qualify as an incentive stock option within the meaning of section 422 of the Code. The interpretation and construction of any provision of this Option or the Plan made by the Committee shall be final and conclusive and, insofar as possible, shall be consistent with the intention expressed in this Section 12.

13. Option Not to Affect Employment . The Option granted hereunder shall not confer upon the Optionee any right to continue in service as an employee, officer or director of the Company or any subsidiary of the Company.

14. Early Disposition of Stock . Subject to the fulfillment by the Optionee of any conditions limiting the disposition of the Option Shares, the Optionee agrees that if the Optionee disposes of any Option Shares before the later of (i) the first anniversary of the date on which the Option Shares are transferred to the Optionee and (ii) the second anniversary of the Grant Date, then the Optionee will notify the Company in writing within 30 days after the date of such disposition.

15. Miscellaneous .

(a) The address for the Optionee to which notice, demands and other communications to be given or delivered under or by reason of the provisions hereof shall be the address contained in the Company’s personnel records, or such other address as the Optionee may provide to the Company by written notice.

(b) This Award may be executed in one or more counterparts all of which taken together will constitute one and the same instrument.

(c) The validity, performance, construction and effect of this Award shall be governed by the laws of the Commonwealth of Pennsylvania, without giving effect to principles of conflicts of law.

(d) The Optionee hereby irrevocably and unconditionally consents to submit to the exclusive jurisdiction of the courts of the Commonwealth of Pennsylvania and of the United States of America, in each case located in Philadelphia, Pennsylvania, for any actions, suits or proceedings arising out of or relating to this Award and the transactions contemplated hereby (“Litigation”) and agrees not to commence any Litigation except in any such court, and further agrees that service of process, summons, notice or document by U.S. registered mail to his respective address shall be effective service of process for any Litigation brought against him in any such court. Each party hereby irrevocably and unconditionally waives any objection to the laying of venue of any Litigation in the courts of the Commonwealth of Pennsylvania or of the United States of America, in each case located in Philadelphia, Pennsylvania, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any Litigation brought in any such court has been brought in an inconvenient forum.

 

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16. Withholding of Taxes . Whenever the Company proposes or is required to deliver or transfer Shares in connection with the exercise of the Option, the Company shall have the right to (a) withhold Shares subject to the Optionee’s exercise of the Option as provided in Paragraphs 7(g)(iv) and 15 of the Plan, (b) require the Optionee to remit to the Company an amount sufficient to satisfy any federal, state and/or local withholding tax requirements prior to the delivery or transfer of any certificate or certificates for such Shares or (c) take whatever action it deems necessary to protect its interests with respect to tax liabilities.

17. Repayment . This Option shall be subject to any repayment or clawback policy of the Company that is currently in effect or that is hereinafter adopted.

18. Incorporation of Plan Terms . This Award is subject to the terms and conditions of the Plan. Such terms and conditions of the Plan are incorporated into and made a part of this Award by reference. In the event of any conflicts between the provisions of this Award and the terms of the Plan, the terms of the Plan will control. In the event, however, of any conflict between the provisions of this Award or the Plan and the provisions of an employment or change-in-control agreement between the Company and the Optionee, the provisions of the latter shall prevail, to the extent consistent with the Plan. Capitalized terms used but not defined in this Award shall have the meanings set forth in the Plan unless the context clearly requires an alternative meaning.

IN WITNESS WHEREOF, the Company has granted this Award on the day and year first above written.

 

DORMAN PRODUCTS, INC.
BY:    

 

I hereby acknowledge receipt of a copy of the forgoing Award and the Plan and, having read them hereby, signify my understanding of, and my agreement with, their terms and conditions. I accept this Option in full satisfaction of any previously written or verbal promises made to me by the Company with respect to option grants.

 

 

    

 

(Name)      (Date)

 

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Exhibit 10.3

DORMAN PRODUCTS, INC.

RESTRICTED STOCK AWARD

This is a Restricted Stock Award (this “Award”) dated [                    ] (the “Grant Date”) from Dorman Products, Inc. (the “Company”) to [                    ] (the “Grantee”).

1. Award of Stock . Effective as of the Grant Date, pursuant to the Dorman Products, Inc. 2018 Stock Option and Stock Incentive Plan (the “Plan”), the Company hereby awards the Grantee [                    ] shares of Common Stock (the “Awarded Shares”), subject to the restrictions and on the terms and conditions set forth in this Award and the Plan.

2. Lapse of Restrictions; Vesting . The Awarded Shares are subject to forfeiture to the Company until they become nonforfeitable in accordance with this Section 2.

(a) The Awarded Shares shall vest and become nonforfeitable as follows:

 

Vesting Date:

   Percent of Award Vested:  
  
  
  

(b) In addition, upon a Change in Control, 100% of the unvested Awarded Shares shall vest and become nonforfeitable.

(c) In addition, upon the Grantee’s termination of employment for any of the following reasons, the unvested Awarded Shares shall vest and become nonforfeitable as indicated:

(i) 100% as of the date of Grantee’s death; or

(ii) 100% as of the date of Grantee’s termination of employment due to Disability.

Except as provided above, upon the termination of employment of Grantee any unvested Awarded Shares will immediately and automatically, without any action on the part of the Company, be forfeited and the Grantee will have no further rights with respect to those Shares.

3. Certificates.

(a) The Company will cause the Awarded Shares to be issued in the Grantee’s name by issuance of a stock certificate or certificates. The Company may, in lieu of issuing such a certificate, arrange for the recording of Grantee’s ownership of the Awarded Shares on a book entry recordkeeping system maintained on behalf of the Company.

 

1


(b) While the Awarded Shares remain forfeitable, the Company will cause an appropriate stop-transfer order to be issued and to remain in effect with respect to the Awarded Shares. As soon as practicable following the time that any Awarded Shares become nonforfeitable (and provided that appropriate arrangements have been made with the Company for the withholding or payment of any taxes that may be due with respect to such Shares), the Company will cause that stop-transfer order to be removed.

(c) If any certificate is issued in respect of Awarded Shares, that certificate will be legended as described herein and held in escrow by the Company’s Secretary or Assistant Secretary or his or her designee. In addition, the Grantee may be required to execute and deliver to the Company a stock power with respect to those Awarded Shares. At such time as those Awarded Shares become nonforfeitable, the Company will cause a new certificate to be issued without that portion of the legend referencing the previously applicable forfeiture conditions and will cause that new certificate to be delivered to the Grantee (again, provided that appropriate arrangements have been made with the Grantee for the withholding or payment of any taxes that may be due with respect to such Shares). The Company may also condition delivery of certificates for Awarded Shares upon receipt from the Grantee of any undertakings that it may determine are appropriate to facilitate compliance with federal and state securities laws.

4. Stock Splits, etc . If, while any of the Awarded Shares remain subject to forfeiture, there occurs any merger, consolidation, reorganization, reclassification, recapitalization, stock split, stock dividend, or other similar change in the Common Stock, then any and all new, substituted or additional securities or other consideration to which the Grantee is entitled by reason of the Grantee’s ownership of the Awarded Shares will be immediately subject to the stop-transfer order and escrow contemplated by Section 3, deposited with the Company and will thereafter be included in the term “Awarded Shares” for all purposes of the Plan and this Award.

5. Rights of Participant . The Grantee shall have all the rights of a shareholder with respect to such Awarded Shares, including, but not limited to, the right to vote such shares and to receive all dividends and other distributions paid with respect to them; provided however , that any cash dividends or distributions paid on the Awarded Shares while those shares remain forfeitable will be deposited with the Company, in escrow, and distributed only when, and if, the Awarded Shares giving rise to such dividends or distributions become nonforfeitable.

6. Tax Consequences . The Grantee acknowledges that the Company has not advised the Grantee regarding the Grantee’s income tax liability in connection with the grant or vesting of the Awarded Shares or with an election under Section 83(b) of the Internal Revenue Code, as amended, with respect to the grant of the Awarded Shares. The Grantee has reviewed with the Grantee’s own tax advisors the federal, state, local and foreign tax consequences of the transactions contemplated by this Agreement. The Grantee is relying solely on such advisors and not on any statements or representations of the Company or any of its agents. The Grantee understands that the Grantee (and not the Company) shall be responsible for the Grantee’s own tax liability that may arise as a result of the transactions contemplated by this Award.

 

2


WHILE THE COMPANY WILL EXERCISE REASONABLE EFFORTS TO ASSIST THE GRANTEE OR OTHERWISE FACILITATE ANY SECTION 83(b) ELECTION MADE BY THE GRANTEE WITH RESPECT TO THE AWARDED SHARES, THE GRANTEE ACKNOWLEDGES THAT IT IS THE GRANTEE’S SOLE RESPONSIBILITY AND NOT THE COMPANY’S TO FILE TIMELY ANY SECTION 83(b) ELECTION.

7. Restriction on Transfer of Awarded Shares . Except for the forfeiture to the Company contemplated by Section 2 hereof, none of the Awarded Shares or any beneficial interest therein shall be transferred, encumbered, pledged or otherwise alienated or disposed of in any way until they have become nonforfeitable in accordance with Section 2 of this Award.

8. Share Legends . A legend will be placed on any certificates evidencing all the Awarded Shares, pursuant to the Plan, applicable law or otherwise.

9. Award Not to Affect Employment . The Awarded Shares granted hereunder shall not confer upon the Grantee any right to continue in service as an employee, officer or director of the Company or any subsidiary of the Company.

10. Miscellaneous .

(a) The address for the Grantee to which notice, demands and other communications to be given or delivered under or by reason of the provisions hereof shall be the address contained in the Company’s personnel records, or such other address as the Grantee may provide to the Company by written notice.

(b) This Award may be executed in one or more counterparts all of which taken together will constitute one and the same instrument.

(c) The validity, performance, construction and effect of this Award shall be governed by the laws of the Commonwealth of Pennsylvania, without giving effect to principles of conflicts of law.

(d) The Grantee hereby irrevocably and unconditionally consents to submit to the exclusive jurisdiction of the courts of the Commonwealth of Pennsylvania and of the United States of America, in each case located in Philadelphia, Pennsylvania, for any actions, suits or proceedings arising out of or relating to this Award and the transactions contemplated hereby (“Litigation”) and agrees not to commence any Litigation except in any such court, and further agrees that service of process, summons, notice or document by U.S. registered mail to his respective address shall be effective service of process for any Litigation brought against him in any such court. Each party hereby irrevocably and unconditionally waives any objection to the laying of venue of any Litigation in the courts of the Commonwealth of Pennsylvania or of the United States of America, in each case located in Philadelphia, Pennsylvania, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any Litigation brought in any such court has been brought in an inconvenient forum.

11. Repayment . This Award shall be subject to any repayment or clawback policy of the Company that is currently in effect or that is hereinafter adopted.

 

3


12. Incorporation of Plan Terms . This Award is subject to the terms and conditions of the Plan. Such terms and conditions of the Plan are incorporated into and made a part of this Award by reference. In the event of any conflicts between the provisions of this Award and the terms of the Plan, the terms of the Plan will control. In the event, however, of any conflict between the provisions of this Award or the Plan and the provisions of an employment or change-in-control agreement between the Company and the Grantee, the provisions of the latter shall prevail, to the extent consistent with the Plan. Capitalized terms used but not defined in this Award shall have the meanings set forth in the Plan unless the context clearly requires an alternative meaning.

IN WITNESS WHEREOF, the Company has granted this Award on the day and year first above written.

 

DORMAN PRODUCTS, INC.
BY:    

 

I hereby acknowledge receipt of a copy of the forgoing Award and the Plan and, having read them hereby, signify my understanding of, and my agreement with, their terms and conditions. I accept this Award in full satisfaction of any previously written or verbal promises made to me by the Company with respect to restricted stock grants.

 

 

   

 

 
(Name)     (Date)  

 

4

Exhibit 10.4

DORMAN PRODUCTS, INC.

PERFORMANCE RESTRICTED STOCK AWARD

This is a Performance Restricted Stock Award (this “Award”) dated [                    ] (the “Grant Date”) from Dorman Products, Inc. (the “Company”) to [            ] (the “Grantee”).

1. Award of Stock . Effective as of the Grant Date, pursuant to the Dorman Products, Inc. 2018 Stock Option and Stock Incentive Plan (the “Plan”), the Company hereby awards the Grantee [            ] shares of Common Stock (the “Awarded Shares”), subject to the restrictions and on the terms and conditions set forth in this Award and the Plan.

2. Lapse of Restrictions; Vesting .

(a) Except as provided in Paragraphs 2(b) and 2(c), the vesting of the Awarded Shares is contingent upon (i) the Company’s achievement of the performance target(s) set forth on Exhibit A hereto (“Performance Target(s)”) during the performance period set forth on Exhibit A hereto (“Performance Period”), and (ii) the Grantee’s continued employment with the Company and its Subsidiaries through the end of the Performance Period. Any Awarded Shares that do not become vested and nonforfeitable as provided in Exhibit A (or Paragraphs 2(b) and 2(c)) shall be forfeited. Awarded Shares will vest and become nonforfeitable only after certification by the Committee of the achievement of the Performance Targets previously established and approved by the Committee for the Performance Period.

(b) If the Grantee’s employment terminates prior to the last day of the Performance Period on account of death or Disability, a pro rata portion of the Grantee’s Awarded Shares will vest and become nonforfeitable at the end of the Performance Period to the extent the Performance Target(s) for the Performance Period are met. The pro rata portion will be determined by multiplying the Awarded Shares that would have vested at the end of the Performance Period pursuant to Section 2(a) and Exhibit A if Grantee’s employment had not terminated prior to the last day of the Performance Period by a fraction, the numerator of which is the number of the Grantee’s completed months of service during the Performance Period and the denominator of which is the number of months in the Performance Period. Thereafter, the number of Awarded Shares vested and nonforfeitable shall be rounded up to the nearest whole Share.

(c) All outstanding Awarded Shares (assuming the maximum performance level) shall become vested immediately upon the occurrence of a Change in Control of the Company.

(d) If the Grantee’s employment is terminated for Cause, whether before or after the last day of the Performance Period, the unvested Awarded Shares shall immediately be forfeited and the Grantee will have no further rights with respect to those Shares.

(e) Except as provided above, upon the termination of the Grantee’s employment prior to the last day of the Performance Period any unvested Awarded Shares will immediately and automatically, without any action on the part of the Company, be forfeited and the Grantee will have no further rights with respect to those Shares.

 

1


3. Certificates.

(a) The Company will cause the Awarded Shares to be issued in the Grantee’s name by issuance of a stock certificate or certificates. The Company may, in lieu of issuing such a certificate, arrange for the recording of Grantee’s ownership of the Awarded Shares on a book entry recordkeeping system maintained on behalf of the Company.

(b) While the Awarded Shares remain forfeitable, the Company will cause an appropriate stop-transfer order to be issued and to remain in effect with respect to the Awarded Shares. As soon as practicable following the time that any Awarded Shares become nonforfeitable (and provided that appropriate arrangements have been made with the Company for the withholding or payment of any taxes that may be due with respect to such Shares), the Company will cause that stop-transfer order to be removed.

(c) If any certificate is issued in respect of Awarded Shares, that certificate will be legended as described herein and held in escrow by the Company’s Secretary or Assistant Secretary or his or her designee. In addition, the Grantee may be required to execute and deliver to the Company a stock power with respect to those Awarded Shares. At such time as those Awarded Shares become nonforfeitable, the Company will cause a new certificate to be issued without that portion of the legend referencing the previously applicable forfeiture conditions and will cause that new certificate to be delivered to the Grantee (again, provided that appropriate arrangements have been made with the Grantee for the withholding or payment of any taxes that may be due with respect to such Shares). The Company may also condition delivery of certificates for Awarded Shares upon receipt from the Grantee of any undertakings that it may determine are appropriate to facilitate compliance with federal and state securities laws.

4. Stock Splits, etc . If, while any of the Awarded Shares remain subject to forfeiture, there occurs any merger, consolidation, reorganization, reclassification, recapitalization, stock split, stock dividend, or other similar change in the Common Stock, then any and all new, substituted or additional securities or other consideration to which the Grantee is entitled by reason of the Grantee’s ownership of the Awarded Shares will be immediately subject to the stop-transfer order and escrow contemplated by Section 3, deposited with the Company and will thereafter be included in the term “Awarded Shares” for all purposes of the Plan and this Award.

5. Rights of Participant . The Grantee shall have all the rights of a shareholder with respect to such Awarded Shares, including, but not limited to, the right to vote such shares and to receive all dividends and other distributions paid with respect to them; provided however , that any cash dividends or distributions paid on the Awarded Shares while those shares remain forfeitable will be deposited with the Company, in escrow, and distributed only when, and if, the Awarded Shares giving rise to such dividends or distributions become nonforfeitable.

6. Tax Consequences . The Grantee acknowledges that the Company has not advised the Grantee regarding the Grantee’s income tax liability in connection with the grant or vesting of the Awarded Shares or with an election under Section 83(b) of the Internal Revenue Code, as amended, with respect to the grant of the Awarded Shares. The Grantee has reviewed with the Grantee’s own tax advisors the federal, state, local and foreign tax consequences of the transactions contemplated by this Agreement. The Grantee is relying solely on such advisors and not on any statements or representations of the Company or any of its agents. The Grantee understands that the Grantee (and not the Company) shall be responsible for the Grantee’s own tax liability that may arise as a result of the transactions contemplated by this Award.

 

2


WHILE THE COMPANY WILL EXERCISE REASONABLE EFFORTS TO ASSIST THE GRANTEE OR OTHERWISE FACILITATE ANY SECTION 83(b) ELECTION MADE BY THE GRANTEE WITH RESPECT TO THE AWARDED SHARES, THE GRANTEE ACKNOWLEDGES THAT IT IS THE GRANTEE’S SOLE RESPONSIBILITY AND NOT THE COMPANY’S TO FILE TIMELY ANY SECTION 83(b) ELECTION.

7. Restriction on Transfer of Awarded Shares . Except for the forfeiture to the Company contemplated by Section 2 hereof, none of the Awarded Shares or any beneficial interest therein shall be transferred, encumbered, pledged or otherwise alienated or disposed of in any way until they have become nonforfeitable in accordance with Section 2 of this Award.

8. Share Legends . A legend will be placed on any certificates evidencing all the Awarded Shares, pursuant to the Plan, applicable law or otherwise.

9. Award Not to Affect Employment . The Awarded Shares granted hereunder shall not confer upon the Grantee any right to continue in service as an employee, officer or director of the Company or any subsidiary of the Company.

10. Miscellaneous .

(a) The address for the Grantee to which notice, demands and other communications to be given or delivered under or by reason of the provisions hereof shall be the address contained in the Company’s personnel records, or such other address as the Grantee may provide to the Company by written notice.

(b) This Award may be executed in one or more counterparts all of which taken together will constitute one and the same instrument.

(c) The validity, performance, construction and effect of this Award shall be governed by the laws of the Commonwealth of Pennsylvania, without giving effect to principles of conflicts of law.

(d) The Grantee hereby irrevocably and unconditionally consents to submit to the exclusive jurisdiction of the courts of the Commonwealth of Pennsylvania and of the United States of America, in each case located in Philadelphia, Pennsylvania, for any actions, suits or proceedings arising out of or relating to this Award and the transactions contemplated hereby (“Litigation”) and agrees not to commence any Litigation except in any such court, and further agrees that service of process, summons, notice or document by U.S. registered mail to his respective address shall be effective service of process for any Litigation brought against him in any such court. Each party hereby irrevocably and unconditionally waives any objection to the laying of venue of any Litigation in the courts of the Commonwealth of Pennsylvania or of the United States of America, in each case located in Philadelphia, Pennsylvania, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any Litigation brought in any such court has been brought in an inconvenient forum.

 

3


11. Repayment . This Award shall be subject to any repayment or clawback policy of the Company that is currently in effect or that is hereinafter adopted.

12. Incorporation of Plan Terms . This Award is subject to the terms and conditions of the Plan. Such terms and conditions of the Plan are incorporated into and made a part of this Award by reference. In the event of any conflicts between the provisions of this Award and the terms of the Plan, the terms of the Plan will control. In the event, however, of any conflict between the provisions of this Award or the Plan and the provisions of an employment or change-in-control agreement between the Company and the Grantee, the provisions of the latter shall prevail, to the extent consistent with the Plan. Capitalized terms used but not defined in this Award shall have the meanings set forth in the Plan unless the context clearly requires an alternative meaning.

IN WITNESS WHEREOF, the Company has granted this Award on the day and year first above written.

 

DORMAN PRODUCTS, INC.
BY:  

 

I hereby acknowledge receipt of a copy of the forgoing Award and the Plan and, having read them hereby, signify my understanding of, and my agreement with, their terms and conditions. I accept this Award in full satisfaction of any previously written or verbal promises made to me by the Company with respect to restricted stock grants.

 

 

  

 

(Name)    (Date)

 

4


DORMAN PRODUCTS, INC.

PERFORMANCE RESTRICTED STOCK AWARD

EXHIBIT A

 

[Performance Standard]

   Performance Restricted Shares Earned
Less than [Threshold]    0
[Threshold]    [        ]
[Target Performance]    [        ]
[Maximum] or greater    [        ]
Linear Interpolation between points

For purposes of this Award:

(a) “ Performance Standard ” means [one or more of the following performance criteria, either individually, alternatively or in any combination, applied either to the Company as a whole or to a business segment or unit, and measured either annually or cumulatively over a period of years, on an absolute basis or relative to a pre-established target, to a previous year’s results or to a designated comparison group, in each case as specified by the Committee in the agreement evidencing the award of restricted shares: (a) income; (b) expense; (c) operating cash flow; (d) capital spending; (e) total shareholder return, (f) growth in revenues, sales, market share, gross income, net income, pre-tax income, pre-tax pre-bonus income, stock price, and/or earnings per share, return on assets, net assets, and/or capital, working capital, free cash flow and/or after tax cash flow, earnings before interest and taxes (EBIT), earnings before interest, taxes, depreciation, and amortization (EBITDA); (g) return on shareholders’ equity, return on invested capital (h) economic or shareholder value added, acquisition of assets, (i) acquisition of companies; (j) creation of new joint ventures; (k) growth in new products; (l) lower product acquisition costs and/or improvements in costs and/or expenses; and (m) other objective financial or service-based standards relevant to the Company’s business as may be established by the Committee, subject to adjustment by the Committee to eliminate the effects of: (i) non-recurring items generally excluded from earnings per share and earnings before interest, taxes and depreciation by institutional investors or analysts when evaluating the Company’s performance, such as one-time gains from asset sales, dispute or litigation charges or recoveries, impairment charges, acts of God, and restructuring charges, but including normal provisions for slow moving and obsolete inventory and accounts receivable; (ii) any acquisitions, divestitures, discontinuance of business operations, or restructuring, and (iii) the cumulative effect of any accounting changes].

Performance Period ” means [                        ].

 

5

Exhibit 10.5

DORMAN PRODUCTS, INC.

RESTRICTED STOCK UNIT AWARD

This is a Restricted Stock Unit Award (this “Award”) dated [                    ] (the “Grant Date”) from Dorman Products, Inc. (the “Company”) to [                    ] (the “Grantee”).

1. Grant of Restricted Stock Units . Effective as of the Grant Date, pursuant to the Dorman Products, Inc. 2018 Stock Option and Stock Incentive Plan (the “Plan”), the Company hereby grants to the Grantee [            ] Restricted Stock Units (the “RSUs), subject to the restrictions and on the terms and conditions set forth in this Award and the Plan.

2. Dividend Equivalents .

(a) The RSUs are granted with dividend equivalent rights. If the Company declares a cash dividend on the Shares, an amount equivalent to such dividend will be credited to an unfunded bookkeeping account with respect to each outstanding and unvested RSU (the “Dividend Equivalent Amount”) on the record date of such dividend.

(b) The Dividend Equivalent Amount will be credited as cash, without interest, and will not be converted to Shares. The Dividend Equivalent Amount will be payable in cash, but only upon the applicable vesting date(s) of the underlying RSUs as determined in accordance with Section 3 below, and will be cancelled and forfeited if the underlying RSUs are cancelled or forfeited as determined in accordance with Section 3 below.

3. Vesting of RSUs .

(a) The RSUs shall vest as follows:

 

Vesting Date:

   Percent of Award Vested:  
  
  
  

As of each Vesting Date, Grantee shall be entitled to the delivery of Shares with respect to such RSUs.

(b) In addition, upon a Change in Control, 100% of the unvested portion of the RSUs shall vest.

 

1


(c) In addition, upon the Grantee’s termination of employment for any of the following reasons, the unvested portion of the RSUs shall vest as indicated:

(i) 100% as of the date of Grantee’s death; or

(ii) 100% as of the date of Grantee’s termination of employment due to Disability.

Except as provided above, upon the termination of employment of the Grantee, any unvested RSUs will immediately and automatically, without any action on the part of the Company, be forfeited and cancelled.

4. Securities Laws . The Committee may from time to time impose any conditions on the Shares issuable with respect to RSUs as it deems necessary or advisable to comply with the then-existing requirements of the 1993 or the 1934 Act, including Rule 16b-3 (or any similar rule) of the Securities and Exchange Commission, and to ensure that Shares are issued and resold in compliance with the 1933 Act.

5. Delivery of Shares . The Company shall notify the Grantee that a Vesting Date with respect to RSUs has occurred. Within thirty (30) business days of a Vesting Date, the Company shall, without payment from the Grantee, satisfy its obligations to (a) pay the Dividend Equivalent Amount (if any) and (b) deliver Shares issuable under the Plan by delivery of a physical certificate for Shares issuable under the Plan without any legend or restrictions, except for such restrictions as may be imposed by the Committee, in its sole judgment, under Section 4, provided that the Dividend Equivalent Amount (if any) will not be paid and/or Shares will not be delivered to the Grantee until appropriate arrangements have been made with the Company for the withholding of any taxes which may be due with respect to such payment of the Dividend Equivalent Amount and/or delivery of such Shares. The Company may condition delivery of certificates for Shares upon the prior receipt from the Grantee of any undertakings which it may determine are required to assure that the certificates are being issued in compliance with federal and state securities laws. The right to payment of any fractional Shares shall be satisfied in cash, measured by the product of the fractional amount times the Fair Market Value of a Share on the Vesting Date, as determined by the Committee. The Company may, in lieu of issuing such a certificate, arrange for the recording of Grantee’s ownership of the Shares on a book entry recordkeeping system maintained on behalf of the Company.

6. Restriction on Transfer of RSUs. RSUs may not be assigned, sold, exchanged, transferred, pledged, hypothecated or otherwise disposed of except by will or the laws of descent and distribution.

7. Award Not to Affect Employment . The Award granted hereunder shall not confer upon Grantee any right to continue in the service as an employee, officer or director of the Company or any subsidiary of the Company.

8. Miscellaneous .

(a) The address for Grantee to which notice, demands and other communications to be given or delivered under or by reason of the provisions hereof shall be Grantee’s address as reflected in the Company’s personnel records, or such other address as the Grantee may provide to the Company by written notice.

 

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(b) This Award may be executed in one or more counterparts all of which taken together will constitute one and the same instrument.

(c) The validity, performance, construction and effect of this Award shall be governed by the laws of the Commonwealth of Pennsylvania, without giving effect to principles of conflicts of law.

(d) The Grantee hereby irrevocably and unconditionally consents to submit to the exclusive jurisdiction of the courts of the Commonwealth of Pennsylvania and of the United States of America, in each case located in Philadelphia, Pennsylvania, for any actions, suits or proceedings arising out of or relating to this Award and the transactions contemplated hereby (“Litigation”) and agrees not to commence any Litigation except in any such court, and further agrees that service of process, summons, notice or document by U.S. registered mail to his respective address shall be effective service of process for any Litigation brought against him in any such court. Each party hereby irrevocably and unconditionally waives any objection to the laying of venue of any Litigation in the courts of the Commonwealth of Pennsylvania or of the United States of America, in each case located in Philadelphia, Pennsylvania, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any Litigation brought in any such court has been brought in an inconvenient forum.

9. Repayment . This Award shall be subject to any repayment or clawback policy of the Company that is currently in effect or that is hereinafter adopted.

10. Incorporation of Plan Terms . This Award is subject to the terms and conditions of the Plan. Such terms and conditions of the Plan are incorporated into and made a part of this Award by reference. In the event of any conflicts between the provisions of this Award and the terms of the Plan, the terms of the Plan will control. In the event, however, of any conflict between the provisions of this Award or the Plan and the provisions of an employment or change-in-control agreement between the Company and the Grantee, the provisions of the latter shall prevail, to the extent consistent with the Plan. Capitalized terms used but not defined in this Award shall have the meanings set forth in the Plan unless the context clearly requires an alternative meaning.

 

-3-


IN WITNESS WHEREOF, the Company has granted this Award on the day and year first above written.

 

DORMAN PRODUCTS, INC.
BY:    

 

I hereby acknowledge receipt of a copy of the forgoing Award and the Plan and, having read them hereby, signify my understanding of, and my agreement with, their terms and conditions. I accept this Award in full satisfaction of any previously written or verbal promises made to me by the Company with respect to restricted stock unit grants.

 

 

   

 

 
(Name)     (Date)  

 

-4-

Exhibit 10.6

DORMAN PRODUCTS, INC.

PERFORMANCE RESTRICTED STOCK UNIT AWARD

This is a Performance Restricted Stock Unit Award (the “Award”) [                    ] (the “Grant Date”) from Dorman Products, Inc. (the “Company”) to [                    ] (the “Grantee”).

1. Grant of Performance Restricted Stock Units .

(a) Effective as of the Grant Date, pursuant to the Dorman Products, Inc. 2018 Stock Option and Stock Incentive Plan (the “Plan”), the Company hereby grants to the Grantee [        ] Performance Restricted Stock Units (the “PSUs), subject to the restrictions and on the terms and conditions set forth in this Award and the Plan.

2. Dividend Equivalents.

(a) The PSUs are granted with dividend equivalent rights. If the Company declares a cash dividend on the Shares, an amount equivalent to such dividend will be credited to an unfunded bookkeeping account with respect to each outstanding and unvested PSU (the “Dividend Equivalent Amount”) on the record date of such dividend.

(b) The Dividend Equivalent Amount will be credited as cash, without interest, and will not be converted to Shares. The Dividend Equivalent Amount will be payable in cash, but only upon the vesting of the underlying PSUs as determined in accordance with Section 3 below, and will be cancelled and forfeited if the underlying PSUs are cancelled or forfeited as determined in accordance with Section 3 below.

3. Vesting of PSUs .

(a) Except as provided in Paragraphs 4 and 5, the vesting of the PSUs is contingent upon (i) the Company’s achievement of the performance target(s) set forth on Exhibit A hereto (“Performance Target(s)”) during the performance period set forth on Exhibit A hereto (“Performance Period”), and (ii) the Grantee’s continued employment with the Company and its Subsidiaries through the end of the Performance Period. Any PSUs that do not become vested as provided in Exhibit A (or Paragraphs 4 and 5) shall be forfeited. PSUs will vest and Shares will be delivered only after certification by the Committee of the achievement of the Performance Targets previously established and approved by the Committee for the Performance Period.

4. Termination of Employment.

(a) In the event of the termination of the Grantee’s employment prior to the last day of the Performance Period, the Grantee shall forfeit any unvested PSUs and shall not have any right to payment in respect thereof, unless otherwise provided in this Paragraph 4 or Paragraph 5 below.

 

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(b) If the Grantee’s employment terminates prior to the last day of the Performance Period on account of death or Disability, a pro rata portion of the Grantee’s PSUs will vest at the end of the Performance Period to the extent the Performance Target(s) for the Performance Period are met. The pro rata portion will be determined by multiplying the PSUs that would have vested at the end of the Performance Period pursuant to Section 3 and Exhibit A if Grantee’s employment had not terminated prior to the last day of the Performance Period by a fraction, the numerator of which is the number of the Grantee’s completed months of service during the Performance Period and the denominator of which is the number of months in the Performance Period. Thereafter, the number of Shares deliverable shall be rounded up to the nearest whole Share. Any Shares deliverable under this Paragraph 4(b) shall be delivered at the same time long-term incentive awards are normally paid and/or delivered after the end of the performance cycle.

(c) If the Grantee’s employment is terminated for Cause, whether before or after the last day of the Performance Period, any unvested PSUs shall immediately be forfeited and the Grantee shall not have any right to payment in respect thereof.

5. Change in Control . Notwithstanding anything contained in this Award to the contrary, all outstanding PSUs (assuming the maximum performance level) shall become vested immediately upon the occurrence of a Change in Control of the Company.

6. Securities Laws . The Committee may from time to time impose any conditions on the Shares issuable with respect to PSUs as it deems necessary or advisable to comply with the then-existing requirements of the 1993 or the 1934 Act, including Rule 16b-3 (or any similar rule) of the Securities and Exchange Commission, and ensure that Shares are issued and resold in compliance with the 1933 Act.

7. Delivery of Shares . The Company shall notify the Grantee that a Vesting Date with respect to PSUs has occurred. Within thirty (30) business days of a Vesting Date, the Company shall, without payment from the Grantee, satisfy its obligation to (a) pay the Dividend Equivalent Amount (if any) and (b) deliver Shares issuable under the Plan by delivery of a physical certificate for Shares issuable under the Plan without any legend or restrictions, except for such restrictions as may be imposed by the Committee, in its sole judgment, under Section 6, provided that Dividend Equivalent Amount (if any) will not be paid and/or Shares will not be delivered to the Grantee until appropriate arrangements have been made with the Company for the withholding of any taxes which may be due with respect to such payment of the Dividend Equivalent Amount and/or delivery of such Shares. The Company may condition delivery of certificates for Shares upon the prior receipt from the Grantee of any undertakings which it may determine are required to assure that the certificates are being issued in compliance with federal and state securities laws. The right to payment of any fractional Shares shall be satisfied in cash, measured by the product of the fractional amount times the Fair Market Value of a Share on the Vesting Date, as determined by the Committee. The Company may, in lieu of issuing such a certificate, arrange for the recording of Grantee’s ownership of the Shares on a book entry recordkeeping system maintained on behalf of the Company.

 

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8. Restriction on Transfer of PSUs . PSUs may not be assigned, sold, exchanged, transferred, pledged, hypothecated or otherwise disposed of except by will or the laws of descent and distribution.

9. Award Not to Affect Employment . The Award granted hereunder shall not confer upon the Grantee any right to continue in the service as an employee, officer or director of the Company or any subsidiary of the Company.

10. Miscellaneous .

(a) The address for Grantee to which notice, demands and other communications to be given or delivered under or by reason of the provisions hereof shall be Grantee’s address as reflected in the Company’s personnel records, or such other address as the Grantee may provide to the Company by written notice.

(b) This Award may be executed in one or more counterparts all of which taken together will constitute one and the same instrument.

(c) The validity, performance, construction and effect of this Award shall be governed by the laws of the Commonwealth of Pennsylvania, without giving effect to principles of conflicts of law.

(d) The Grantee hereby irrevocably and unconditionally consents to submit to the exclusive jurisdiction of the courts of the Commonwealth of Pennsylvania and of the United States of America, in each case located in Philadelphia, Pennsylvania, for any actions, suits or proceedings arising out of or relating to this Award and the transactions contemplated hereby (“Litigation”) and agrees not to commence any Litigation except in any such court, and further agrees that service of process, summons, notice or document by U.S. registered mail to his respective address shall be effective service of process for any Litigation brought against him in any such court. Each party hereby irrevocably and unconditionally waives any objection to the laying of venue of any Litigation in the courts of the Commonwealth of Pennsylvania or of the United States of America, in each case located in Philadelphia, Pennsylvania, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any Litigation brought in any such court has been brought in an inconvenient forum.

11. Repayment . This Award shall be subject to any repayment or clawback policy of the Company that is currently in effect or that is hereinafter adopted.

12. Incorporation of Plan Terms . This Award is subject to the terms and conditions of the Plan. Such terms and conditions of the Plan are incorporated into and made a part of this Award by reference. In the event of any conflicts between the provisions of this Award and the terms of the Plan, the terms of the Plan will control. In the event, however, of any conflict between the provisions of this Award or the Plan and the provisions of an employment or change-in-control agreement between the Company and the Grantee, the provisions of the latter shall prevail, to the extent consistent with the Plan. Capitalized terms used but not defined in this Award shall have the meanings set forth in the Plan unless the context clearly requires an alternative meaning.

 

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IN WITNESS WHEREOF, the Company has granted this Award on the day and year first above written.

 

DORMAN PRODUCTS, INC.
BY:  

 

 

I hereby acknowledge receipt of a copy of the forgoing Award and the Plan and, having read them hereby, signify my understanding of, and my agreement with, their terms and conditions. I accept this Award in full satisfaction of any previously written or verbal promises made to me by the Company with respect to restricted stock unit grants.

 

 

      

 

(Name)

    

(Date)

    

 

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DORMAN PRODUCTS, INC.

PERFORMANCE RESTRICTED STOCK UNIT AWARD

EXHIBIT A

 

[Performance Standard]

   Performance Restricted Stock Units Earned   

 

Less than [Threshold]

   0   

[Threshold]

   [        ]   

[Target Performance]

   [        ]   

[Maximum] or greater

   [        ]   

                     Linear Interpolation between points

For purposes of this Award:

(a) “ Performance Standard ” means [one or more of the following performance criteria, either individually, alternatively or in any combination, applied either to the Company as a whole or to a business segment or unit, and measured either annually or cumulatively over a period of years, on an absolute basis or relative to a pre-established target, to a previous year’s results or to a designated comparison group, in each case as specified by the Committee in the agreement evidencing the award of restricted shares: (a) income; (b) expense; (c) operating cash flow; (d) capital spending; (e) total shareholder return, (f) growth in revenues, sales, market share, gross income, net income, pre-tax income, pre-tax pre-bonus income, stock price, and/or earnings per share, return on assets, net assets, and/or capital, working capital, free cash flow and/or after tax cash flow, earnings before interest and taxes (EBIT), earnings before interest, taxes, depreciation, and amortization (EBITDA); (g) return on shareholders’ equity, return on invested capital (h) economic or shareholder value added, acquisition of assets, (i) acquisition of companies; (j) creation of new joint ventures; (k) growth in new products; (l) lower product acquisition costs and/or improvements in costs and/or expenses; and (m) other objective financial or service-based standards relevant to the Company’s business as may be established by the Committee, subject to adjustment by the Committee to eliminate the effects of: (i) non-recurring items generally excluded from earnings per share and earnings before interest, taxes and depreciation by institutional investors or analysts when evaluating the Company’s performance, such as one-time gains from asset sales, dispute or litigation charges or recoveries, impairment charges, acts of God, and restructuring charges, but including normal provisions for slow moving and obsolete inventory and accounts receivable; (ii) any acquisitions, divestitures, discontinuance of business operations, or restructuring, and (iii) the cumulative effect of any accounting changes].

(b) “ Performance Period ” means [                    ].

 

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