RESTRICTED STOCK UNIT GRANT NOTICE
2018 OMNIBUS INCENTIVE PLAN
frontdoor, inc., a Delaware corporation (the “Company”), pursuant to its 2018 Omnibus Incentive Plan (the “Plan”), hereby grants to the Associate set forth below the number of Restricted Stock Units (“RSUs”), set forth below. The RSUs are subject to all of the terms and conditions as set forth in this grant notice, in the Restricted Stock Unit Terms and Conditions (attached hereto) (the “RSU T&Cs”), and in the Plan, all of which are incorporated herein in their entirety. Capitalized terms not otherwise defined herein or in the RSU T&Cs shall have the meaning set forth in the Plan.
Grant Date: ###GRANT_DATE###
Vesting:Provided that the Associate has not undergone a Termination of employment at the time of each applicable vesting date (or event), the RSUs will vest as follows:
One third (1/3) of the RSUs will vest on the first anniversary of the Grant Date; and
One third (1/3) of the RSUs will vest on the second anniversary of the Grant Date; and
One third (1/3) of the RSUs will vest on the third anniversary of the Grant Date;
provided, however, that in the event that the Associate undergoes a Termination of employment as a result of such Associate’s death or Disability, such Associate shall vest with respect to the RSUs that would have vested on the next scheduled vesting date multiplied by a fraction, the numerator of which is the number of days elapsed since (x) the Grant Date, if such Termination of employment occurs on or prior to the first anniversary of the Grant Date, or (y) the most recent prior anniversary of the Grant Date, if such Termination of employment occurs after the first anniversary of the Grant Date, and the denominator of which is 365 (or 366, as applicable).
[Signature Page to Time-Based Restricted Stock Unit Award]
THE UNDERSIGNED ASSOCIATE ACKNOWLEDGES RECEIPT OF THIS RESTRICTED STOCK UNIT GRANT NOTICE, THE TERMS AND CONDITIONS AND THE PLAN, AND, AS AN EXPRESS CONDITION TO THE GRANT OF RESTRICTED STOCK UNITS HEREUNDER, AGREES TO BE BOUND BY THE TERMS OF THIS RESTRICTED STOCK UNIT GRANT NOTICE, THE TERMS AND CONDITIONS AND THE PLAN.
[Signature Page to Time-Based Restricted Stock Unit Award]
TERMS AND CONDITIONS
RESTRICTED STOCK UNITS
2018 OMNIBUS INCENTIVE PLAN
Pursuant to the Restricted Stock Unit Grant Notice (the “Grant Notice”) delivered to the Associate (as defined in the Grant Notice), and subject to the terms of these Restricted Stock Unit Terms and Conditions (these “RSU T&Cs”) and the frontdoor, inc. 2018 Omnibus Incentive Plan (the “Plan”), frontdoor, inc., a Delaware corporation (the “Company”), and the Associate agree as follows. Capitalized terms not otherwise defined herein shall have the same meaning as set forth in the Plan and the Grant Notice.
1. Grant of Restricted Stock Units. Subject to the terms and conditions set forth herein and in the Plan, the Company hereby grants to the Associate the number of Restricted Stock Units (the “RSUs”) provided in the Grant Notice. The Company may make one or more additional grants of Restricted Stock Units to the Associate under these RSU T&Cs by providing the Associate with a new Grant Notice, which may also include any terms and conditions differing from these RSU T&Cs to the extent provided therein. The Company reserves all rights with respect to the granting of additional Restricted Stock Units and makes no implied promise to grant additional Restricted Stock Units.
2. Vesting. Subject to the conditions contained herein and in the Plan, the RSUs shall vest as provided in the Grant Notice.
3. Settlement of RSUs. Subject to Section 8 hereof, promptly following the date on which any RSUs becomes vested, and in any event no later than March 15th of the calendar year following the calendar year in which such vesting occurs (the “Settlement Date”), the Company shall issue to the Associate or the Associate’s beneficiary, without charge, one (1) share of Company Common Stock for each such vested RSU; provided, however, that the Administrator may, in its sole discretion, elect to (A) pay cash or part cash and part Shares in lieu of issuing only Shares; or (B) defer the issuance of Shares (or cash or part cash and Shares, as the case may be) beyond the Settlement Date if such extension would not cause adverse tax consequences under Section 409A of the Code or any successor provision. If a cash payment is made in lieu of issuing Shares in respect of such RSUs, the amount of such payment shall be equal to the Fair Market Value per share of the Company Common Stock as of the applicable vesting date (or applicable date of settlement if clause (B) above is applicable).
4. Treatment of RSUs Upon Termination. Unless otherwise (x) determined by the Administrator or (y) set forth in the Grant Notice, upon Termination of employment of the Associate:
(a) all vesting with respect to the RSUs shall cease (after taking into account any vesting of Restricted Stock Units as set forth in the Grant Notice); and
(b) the unvested RSUs shall be forfeited to the Company by the Associate as of the date of such Termination for no consideration.
(a) Unless otherwise (x) determined by the Administrator or (y) set forth in the Grant Notice, no cancellation, acceleration of vesting or other payment shall occur with respect to any RSU in connection with a Change in Control occurring prior to the third anniversary of the Grant Date, if the Administrator reasonably determines prior to the Change in Control that the Associate shall receive an “Alternative Award” meeting the requirements of the Plan; provided, however, that if within two years following a Change in Control, the
Associate’s employment is involuntarily (other than for Cause) terminated or the Associate resigns with Good Reason (as defined below), at a time when any portion of the Alternative Award is unvested, the unvested portion of such Alternative Award shall immediately vest in full and such Associate shall be provided with either cash or marketable stock equal to the fair market value of the stock subject to the Alternative Award on the date of termination.
(b) For purposes hereof, “Good Reason” means, without the Associate’s written consent, the occurrence of any of the following events:
(i) The reduction in any material respect in the Associate’s position(s), authorities or responsibilities that the Associate had with the Company immediately prior to the time of the Change in Control;
(ii) A material reduction in the Associate’s annual rate of base salary, annual target cash bonus opportunity or annual target long-term incentive opportunity, each in effect as of immediately prior to the date of the Change in Control; or
(iii) A material change in the location of the Associate’s location of work which will be at least more than 50 miles from the Associate’s place at work at the Company immediately prior to the date of the Change in Control.
If the Associate determines that Good Reason exists, the Associate must notify the Company in writing, within ninety (90) days following the initial existence of such grounds that the Associate determines constitutes Good Reason, or else such event shall not constitute Good Reason under the terms of the Associate’s employment. If the Company remedies such event within thirty (30) days following receipt of such notice, the Associate may not terminate employment for Good Reason as a result of such event (the “Cure Period”). In the event the Company does not timely remedy such event, the Associate must terminate his employment ninety (90) days following the end of the Cure Period.
6. Dividend Equivalents. If the Company pays any cash dividend or similar cash distribution on the Company Common Stock, the Company shall credit to the Associate’s account with additional RSUs in an amount equal to (a) the product of (i) the number of the Associate’s RSUs as of the record date for such distribution times (ii) the per share amount of such dividend or similar cash distribution on Company Common Stock, divided by (b) the Fair Market Value on the date such additional RSUs are so credited, rounded down to the nearest whole number of shares. If the Company makes any dividend or other distribution on the Company Common Stock in the form of Company Common Stock or other securities, the Company will credit the Associate’s account with that number of additional shares of Company Common Stock or other securities that would have been distributed with respect to that number of shares of Company Common Stock underlying the Associate’s RSUs as of the record date thereof. Any cash amounts or shares of Company Common Stock or other securities credited to the Associate’s account shall be paid to the Associate on the applicable settlement date.
7. Restriction on Transfer; Non-Transferability of RSUs. The RSUs are not assignable or transferable, in whole or in part, and they may not, directly or indirectly, be offered, transferred, sold, pledged, assigned, alienated, hypothecated or otherwise disposed of or encumbered (including, but not limited to, by gift, operation of law or otherwise). Except as otherwise provided herein, no assignment or transfer of the RSUs, or of the rights represented thereby, whether voluntary or involuntary, by operation of law or otherwise, shall vest
in the assignee or transferee any interest or right herein whatsoever, but immediately upon such attempted assignment or transfer the RSUs shall terminate and become of no further effect.
8. Tax Withholding. Any applicable tax withholding requirements in connection with the RSUs shall be satisfied in accordance with Section 15.11 of the Plan.
9. Restrictive Covenant Agreement. The Associate acknowledges and agrees that as a condition of receipt of the grant of the RSUs the Associate shall execute and deliver to the Company a Noncompetition, Assignment of Work Product and Confidentiality Agreement (the “Restrictive Covenant Agreement”), in the form attached hereto as Exhibit A, the provisions of which are hereby incorporated by reference. The Associate acknowledges that the Associate has read and understands such covenants, including, specifically, the scope and duration thereof, and acknowledges and agrees that the terms of such Restrictive Covenant Agreement are in consideration for the Associate’s receipt of the grant of the RSUs under the Grant Notice, the Associate’s receipt of other benefits provided in the Grant Notice, these RSU T&Cs, the Plan and elsewhere, and the Associate’s access to Confidential Information (as defined in the Restrictive Covenant Agreement). The Restrictive Covenant Agreement is in addition to and does not supersede any other agreements between the Associate and the Company and its Subsidiaries prohibiting competition with the Company and its Subsidiaries. No provisions in the Plan shall narrow the restrictions of, or terminate, the Restrictive Covenant Agreement and in the event of any inconsistency between the Restrictive Covenant Agreement and the Plan, the Restrictive Covenant Agreement shall govern. Nothing in the Restrictive Covenant Agreement shall be construed to restrict the right of an attorney to practice law to the extent protected by statute, common law or applicable rules of professional conduct.
(a) Incorporation of Forfeiture Provisions. The Associate acknowledges and agrees that, pursuant to the Plan, he or she shall be subject to the Company’s Clawback Policy and any generally applicable disgorgement or forfeiture provisions set forth in Article XIII of the Plan as of the Grant Date or as required by applicable law after the Grant Date.
(b) Dispute Resolution. Any dispute or controversy between the Associate and the Company, whether arising out of or relating to these RSU T&Cs, the breach of these RSU T&Cs, or otherwise, shall be resolved in accordance with the frontdoor We Listen Dispute Resolution Plan then in effect. Notwithstanding the foregoing, the Associate agrees that the Company may seek a temporary restraining order and/or preliminary injunction in any court of competent jurisdiction, without the posting of a bond, in order to preserve the status quo or to enforce the restrictive covenants contained on the Restrictive Covenant Agreement.
(c) Authorization to Share Personal Data. The Associate authorizes any Affiliate of the Company that employs the Associate or that otherwise has or lawfully obtains personal data relating to the Associate to divulge or transfer such personal data to the Company or to a third party, in each case in any jurisdiction, if and to the extent appropriate in connection with these RSU T&Cs or the administration of the Plan.
(d) No Rights as Stockholder; No Voting Rights. The Associate shall have no rights as a stockholder of the Company with respect to any RSUs or Shares covered by the RSUs until the delivery of the Shares.
(e) No Right to Continued Employment. Nothing in these RSU T&Cs shall be deemed to confer on the Associate any right to continue in the employ of the Company or any Subsidiary, or to interfere with or limit in any way the right of the Company or any Subsidiary to terminate such employment at any time.
express or implied, is intended or shall be construed to give any person other than the parties to these RSU T&Cs or their respective successors or assigns any legal or equitable right, remedy or claim under or in respect of any agreement or any provision contained herein.
(i) Waiver. Any party hereto or beneficiary hereof may by written notice to the other party (A) waive compliance with any of the conditions or covenants of the other party contained in these RSU T&Cs and (B) waive or modify performance of any of the obligations of the other party under these Terms and Condition. Except as provided in the preceding sentence, no action taken pursuant to these RSU T&Cs, including, without limitation, any investigation by or on behalf of any party or beneficiary, shall be deemed to constitute a waiver by the party or beneficiary taking such action of compliance with any representations, warranties, covenants or agreements contained herein. The waiver by any party hereto or beneficiary hereof of a breach of any provision of these RSU T&Cs shall not operate or be construed as a waiver of any preceding or succeeding breach and no failure by a party or beneficiary to exercise any right or privilege hereunder shall be deemed a waiver of such party’s or beneficiary’s rights or privileges hereunder or shall be deemed a waiver of such party’s or beneficiary’s rights to exercise the same at any subsequent time or times hereunder.
(ii) Amendment. These RSU T&Cs may not be amended, modified or supplemented orally, but only by a written instrument executed by the Associate and the Company.
(h) Assignability. Neither these RSU T&Cs nor any right, remedy, obligation or liability arising hereunder or by reason hereof shall be assignable by the Company or the Associate without the prior written consent of the other party.
(i) Applicable Law and Forum. These RSU T&Cs shall be governed by and construed in accordance with the law of the State of Delaware regardless of the application of rules of conflict of law that would apply the laws of any other jurisdiction. Subject to the dispute resolution provision contained herein, any judicial action to enforce, interpret or challenge these RSU T&Cs shall be brought in the federal or state courts located in the State of Delaware, which shall be the exclusive forum for resolving such disputes. Both parties irrevocably consent to the personal jurisdiction of such courts for purposes of any such action.
(k) Section and Other Headings, etc. The section and other headings contained in these RSU T&Cs are for reference purposes only and shall not affect the meaning or interpretation of these RSU T&Cs.
(l) Counterparts. These RSU T&Cs may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall constitute one and the same instrument.
To the extent that the Company has established, either itself or through a third-party plan administrator, the ability to accept these RSU T&Cs electronically, such acceptance shall constitute the Associate’s signature hereto.
(m) Plan. The terms and provisions of the Plan are incorporated herein by reference. In the event of a conflict or inconsistency between the terms and provisions of the Plan or the Grant Notice and the provisions of these RSU T&Cs, the Plan or the Grant Notice, as applicable, shall govern and control.