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EXHIBIT 10(p)
FORM OF
PERFORMANCE SHARE GRANT
AGREEMENT
Dated:
,
200X
To: «FirstName»
«LastName»
Pursuant to Handleman Company’s 2001 Stock
Option and Incentive Plan (the “ Plan ”),
Handleman Company (the “ Corporation ”)
hereby grants you the right to receive shares (“
shares ”) of the Corporation’s common
stock upon the terms of this Agreement and the Plan, which Plan, as
it may be amended from time to time, is made a part of and
incorporated by reference into this Agreement and is available upon
request.
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1.
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Your right to
receive shares, and the number of shares you may receive, under
this Agreement shall be contingent upon achievement of the
following performance goals:
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(i)
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If Free Cash
Flow (defined below) for the Performance Period (defined below) is
less than the XXth percentile of Free Cash Flow for the Peer Group
(defined below), you shall not be entitled to receive any shares
under this Agreement.
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(ii)
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If Free Cash
Flow for the Performance Period is equal to or greater than the
XXth percentile, but less than the XXth percentile of Free Cash
Flow for the Peer Group, the number of shares you may receive under
this Agreement shall equal the sum of (i) fifty percent (50%) plus
(ii) the product of 50% multiplied by a percentage determined based
upon where the Company’s actual Free Cash Flow performance is
within the range between the XXth percentile and the XX
th
percentile of Free Cash
Flow for the Peer Group, calculated linearly, multiplied by the
Target number of shares (see Exhibit 1).
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(iii)
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If Free Cash
Flow for the Performance Period is equal to or greater than the
XX th percentile, but less than the
XX th percentile of Free Cash Flow for
the Peer Group, the number of shares you may receive under this
Agreement shall equal the sum of (i) one hundred percent (100%)
plus (ii) the product of 50% multiplied by a percentage determined
based upon where the Company’s actual Free Cash Flow
performance is within the range between the XX
th
percentile and
XX th percentile of Free Cash Flow for the
Peer Group, calculated linearly, multiplied by the Target number of
shares (see Exhibit 1).
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(iv)
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If Free Cash
Flow for the Performance Period is equal to or greater than XXth
percentile of Free Cash Flow for the Peer Group, the number of
shares you may receive under this Agreement shall equal one hundred
fifty percent (150%) of the Target Number.
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For the purposes of this Agreement Free Cash
Flow is defined as:
Cash Flow from Operations minus Capital
Expenditures plus Gains
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