PERFORMANCE-BASED
RESTRICTED STOCK UNIT AWARD AGREEMENT
UNDER THE ALLIANCE DATA SYSTEMS CORPORATION
2005 LONG-TERM INCENTIVE PLAN
THIS RESTRICTED STOCK UNIT AWARD
AGREEMENT (the “Agreement” ), made as of DATE
(the “Grant Date” ) by and between Alliance Data
Systems Corporation (the “Company” ) and NAME
(the “Participant” ) who is an employee of the
Company or one of its Affiliates, evidences the grant by the
Company of an award of restricted stock units (the
“Award”) to the Participant and the
Participant’s acceptance of the Award in accordance with the
provisions of the Alliance Data Systems Corporation 2005 Long-Term
Incentive Plan (the “Plan”) . The Company and
the Participant agree as follows:
1. Basis for
Award . The Award is made under the Plan pursuant to
Section 6(f) thereof for service rendered to the Company by the
Participant.
2. Restricted Stock Units
Awarded .
(a) The Company hereby awards
to the Participant, in the aggregate, AMOUNT Restricted Stock Units
which shall be subject to the conditions set forth in the Plan and
this Agreement.
(b) Restricted Stock Units
shall be evidenced by an account established and maintained for the
Participant, which shall be credited for the number of Restricted
Stock Units granted to the Participant. By accepting this Award,
the Participant acknowledges that the Company does not have an
adequate remedy in damages for the breach by the Participant of the
conditions and covenants set forth in this Agreement and agrees
that the Company is entitled to and may obtain an order or a decree
of specific performance against the Participant issued by any court
having jurisdiction.
(c) Except as provided in the
Plan or this Agreement, prior to vesting as provided in Sections 3
of this Agreement, the Restricted Stock Units will be forfeited by
the Participant and all of the Participant’s rights to stock
underlying the Award shall immediately terminate without any
payment or consideration by the Company in the event of a
Participant’s termination of employment as provided in
Section 4 below.
3. Vesting
(a) Subject to Sections 2
and 4 of this Agreement, the restrictions on the Award will lapse
as set forth in Section 3(b) below; provided that ,
the Participant is employed on each Vesting Date by the Company or
an Affiliate. As soon as practicable after the Award vests and
consistent with Section 409A of the Code, payment shall be
made in Stock (based upon the Fair Market Value of the Stock on the
day all restrictions lapse). The Committee shall cause a Stock
certificate to be delivered to the Participant or the
Participant’s electronic account with respect to such Stock
free of all restrictions or the Stock may be delivered
electronically. Pursuant to Section 11, the number of shares
delivered shall be net of the number of shares withheld if any.
(b) The restrictions described
in this Agreement will lapse upon determination by the Board or the
Compensation Committee of the Board that the Company’s cash
Earnings Per Share (“EPS”) growth for the period from
January 1, 2009 to December 31, 2009 meets the vesting
criteria set forth in the 2009 cash EPS Performance Chart shown
below. Upon such determination, the restrictions will lapse with
respect to 33% of the Award on February 23, 2010 ; the
restrictions will lapse with respect to an additional 33% of the
Award on February 23, 2011 ; and the restrictions will
lapse with respect to the final 34% of the Award on
February 23, 2012 (each such date a “Vesting
Date”); provided , that , the Participant is
employed by the Company on each Vesting Date. If the Participant
ceases to be employed by the Company at any time prior to a Vesting
Date, any and all unvested Restricted Stock Units shall
automatically be forfeited upon such cessation of service.
The aggregate number of Restricted
Stock Units on which restrictions will lapse on each Vesting Date
will be determined in accordance with the following 2009 cash EPS
Performance Chart. For example, if the Company’s cash EPS
growth for the period from January 1 through December 31, 2009
is determined by the Board or the Compensation Committee of the
Board to be 13%, then restrictions on 74.2% of the total Award will
lapse, with restrictions on 33% of the 74.2% lapsing on
February 23, 2010, restrictions on 33% of the 74.2% lapsing on
February 23, 2011, and restrictions on 34% of the 74.2%
lapsing on February 23, 2012, provided the Participant is
employed by the Company on each Vesting Date:
Alliance Data Cash EPS: % of Target PBRSU Award Earned
$5.15: 100% (17% growth)
$5.14: 98.3%
$5.13: 96.6%
$5.12: 94.9%
$5.11: 93.1%
$5.10: 91.4%
$5.09: 89.7%
$5.08: 88.0%
$5.07: 86.2%
$5.06: 84.5%
$5.05: 82.8%
$5.04: 81.1%
$5.03: 79.3%
$5.02: 77.6%
$5.01: 75.9%
$5.00: 74.2% (13% growth)
$4.99: 72.4%
$4.98: 70.7%
$4.97: 69.0%
$4.96: 67.3%
$4.95: 65.5%
$4.94: 63.8%
$4.93: 62.1%
$4.92: 60.4%
$4.91: 58.6%
$4.90: 56.9%
$4.89: 55.2%
$4.88: 53.5%
$4.87: 51.7%
$4.86: 50.0% (10% growth)
4. Termination of
Employment . Unless otherwise determined by the Committee
at time of grant or thereafter or as otherwise provided in the
Plan, any unvested portion of any outstanding Award held by a
Participant at the time of termination of employment or other
service for any reason will be forfeited upon such termination.
5. Company;
Participant .
(a) The term
“Company” as used in this Agreement with
reference to employment shall include the Company and its
Affiliates, as appropriate.
(b) Whenever the word
