RESTRICTED STOCK AGREEMENT
EXHIBIT
10.3
EXECUTION
COPY
EXHIBIT
B
THIS RESTRICTED STOCK AGREEMENT (this
“Agreement”) dated as of June 1, 2010, by and between Frederick’s of Hollywood
Group Inc., a New York corporation (the “Company”), and Xxxxxx Xxxxx (the
“Employee”).
WHEREAS,
on June 1, 2010, pursuant to the terms and conditions of the Company’s 2000
Performance Equity Plan (the “Plan”), the Board of Directors of the Company (the
“Board”) authorized the issuance to the Employee, effective on the date hereof,
of 100,000 shares of the authorized but unissued common stock of the Company,
$.01 par value (“Shares”), conditioned upon the Employee’s acceptance thereof
upon the terms and conditions set forth in this Agreement and subject to the
terms of the Plan; and
WHEREAS,
the Employee desires to acquire the Shares on the terms and conditions set forth
in this Agreement and subject to the terms of the Plan;
IT IS
AGREED:
1. Grant of
Shares.
1.1 The
Company hereby issues to the Employee 100,000 Shares on the terms and conditions
set forth herein.
1.2 Subject
to Section 3 below, the Shares shall be subject to forfeiture in the event of
the termination of Employee’s employment prior to the following
dates: prior to June 1, 2011, all Shares shall be subject to
forfeiture, on or after June 1, 2011 and prior to June 1, 2012, 75,000 Shares
shall be subject to forfeiture, on or after June 1, 2012 and prior to June 1,
2013, 50,000 Shares shall be subject to forfeiture, on or after June 1, 2013, no
Shares shall be subject to forfeiture (each a “Restriction Period” with respect
to the applicable number of Shares).
1.3 The
Shares shall be represented by three stock certificates registered in the name
of the Employee for 25,000, 25,000 and 50,000 Shares. All three
certificates (“Share Certificates”) shall bear the legends set forth in
Sections 6(vi) and 6(vii) of this Agreement. The Share
Certificates shall be deposited with the Company, together with stock powers
endorsed in blank by the Employee and signature Medallion Guaranteed, which will
permit transfer to the Company of the Shares represented by each such Share
Certificate that is forfeited or shall not become vested in accordance with the
terms of this Agreement and the Plan.
1.4 After
issuance, the Shares shall constitute issued and outstanding shares of common
stock of the Company for all corporate purposes, and the Employee shall have the
right to vote such Shares, to receive and retain all cash dividends as the Board
may, in its sole discretion, pay on such Shares, and to exercise all of the
rights, powers and privileges of a holder of common stock with respect to such
Shares, except that (a) the Employee shall not be entitled to delivery of a
Share Certificate until the Shares represented by such Share Certificate vest in
accordance with Section 1.3 below and (b) other than cash dividends as the
Board, in its sole discretion, distributes, the Company will retain custody of
all distributions (“Retained Distributions”) made or declared with respect to
the Shares (and such Retained Distributions will be subject to the same
restrictions, terms and conditions as applicable to the Shares) until such time,
if ever, as the Shares with respect to which such Retained Distributions shall
have been distributed have become vested.
1.5 If
the Employee is still an employee of the Company at the end of a Restriction
Period, all of the Shares that are no longer subject to forfeiture, and the
Retained Distributions with respect thereto, shall vest and shall no longer be
subject to forfeiture by the Employee. After the date that any Shares
become vested, the Company shall instruct its transfer agent to issue and
deliver to the Employee a new certificate for the Shares, which certificate
shall not bear the legend set forth in Section 6(vii). If, at any
time prior to the vesting of any Shares in accordance with the first sentence of
this Section 1.3, the Employee’s employment with the Company is terminated for
any reason, subject to the provisions of Section 3, then the Shares that have
not then vested (and the Retained Distributions with respect thereto) shall be
forfeited to the Company and the Employee shall not thereafter have any rights
with respect to such Shares. In such event, the Company is authorized
by the Employee to complete the stock powers to transfer the Shares to the
Company and deliver the Share Certificates and stock powers to the Company’s
transfer agent to return the Shares to the status of authorized but unissued
shares of common stock.
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1.6 “Employment”. The
Employee shall be considered to be employed by the Company pursuant to this
Section 1 if the Employment Agreement dated as of June 1, 2010 between the
Company and the Employee, as it may be amended from time to time (“Employment
Agreement”), has not been terminated by either party.
1.7 No Right to
Employment. Nothing in the Plan or in this Agreement shall
confer on the Employee any right to continue in the employ of, or other
relationship with, the Company (or with any parent, subsidiary or affiliate of
the Company) or limit in any way the right of the Company (or of any parent,
subsidiary or affiliate of the Company) to terminate the Employee’s employment
or other relationship with the Company (or with any parent, subsidiary or
affiliate of the Company) at any time, with or without cause.
2. Withholding
Tax. Not later than the date as of which an amount first
becomes includible in the gross income of the Employee for federal income tax
purposes with respect to the Shares, the Employee shall pay to the Company, or
make arrangements satisfactory to the Company regarding the payment of, any
federal, state and local taxes of any kind required by law to be withheld or
paid with respect to such amount. Notwithstanding anything in this
Agreement to the contrary, the obligations of the Company under the Plan and
pursuant to this Agreement shall be conditional upon such payment or
arrangements with the Company and the Company shall, to the extent permitted by
law, have the right to deduct any such taxes from any payment of any kind
otherwise due to the Employee from the Company.
3. Special Vesting in Certain
Circumstances. If Employee’s employment is terminated by the
Company for any reason other than (i) death, (ii) Disability (as defined in the
Employment Agreement) or (iii) for Cause (as defined in the Employment
Agreement), or if Employee terminates his employment for Good Reason (as defined
in the Employment Agreement), then all of the Shares that would otherwise have
vested on June 1, 2011, June 1, 2012 and June 1, 2013 shall continue to vest as
scheduled.
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4. Nonassignability of
Shares. The Shares shall not be assignable or transferable
until they have vested.
5. Company
Representations. The Company hereby represents and warrants to
the Employee that:
(i) the
Company, by appropriate and all required action, is duly authorized to enter
into this Agreement and consummate all of the transactions contemplated
hereunder; and
(ii) the
Shares, when issued and delivered by the Company to the Employee in accordance
with the terms and conditions hereof, will be duly and validly issued and fully
paid and non-assessable.
6. Employee
Representations. The Employee hereby represents and warrants
to the Company that:
(i) he
is acquiring the Shares for his own account and not with a view towards the
distribution thereof;
(ii) he
has received a copy of all reports and documents required to be filed by the
Company with the Securities and Exchange Commission pursuant to the Securities
Exchange Act of 1934, as amended (“Exchange Act”) within the last twenty-four
(24) months and all reports issued by the Company to its
shareholders;
(iii) he
understands that he must bear the economic risk of the investment in the Shares,
which cannot be sold by him unless they are registered under the Securities Act
of 1933, as amended (“Securities Act”), or an exemption therefrom is available
thereunder; provided that he understands that the Company is under no obligation
to register the Shares for sale under the Securities Act;
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(iv) in
his position with the Company, he has had both the opportunity to ask questions
and receive answers from the officers and directors of the Company and all
persons acting on its behalf concerning the terms and conditions of the offer
made hereunder and to obtain any additional information to the extent the
Company possesses or may possess such information or can acquire it without
unreasonable effort or expense necessary to verify the accuracy of the
information obtained pursuant to clause (ii) above;
(v) he
is aware that the Company shall place stop transfer orders with its transfer
agent against the transfer of the Shares in the absence of registration under
the Securities Act or an exemption therefrom as provided herein;
(vi) in
the absence of an effective registration statement under the Securities Act, the
certificates evidencing the Shares shall bear the following legend:
“The
securities represented by this certificate have been acquired for investment and
have not been registered under the Securities Act of 1933, as amended, or
applicable state securities laws and may not be sold or transferred in the
absence of such registration or pursuant to an exemption therefrom under said
Act and such laws, supported by an opinion of counsel, reasonably satisfactory
to the Company and its counsel, that such registration is not
required.”
;
and
(vii) he
understands that the certificates evidencing the Shares shall also bear the
following legend:
“The
shares represented by this certificate have been acquired pursuant to a
Restricted Stock Agreement, dated as of June 1, 2010, a copy of which is on file
with the Company, and may not be transferred, pledged or disposed of except in
accordance with the terms and conditions thereof.”
7. Restriction on Transfer of
Shares. Notwithstanding anything in this Agreement to the
contrary, and in addition to the provisions of Section 4 of this Agreement, the
Employee hereby agrees that he shall not sell, transfer by any means or
otherwise dispose of the Shares acquired by him without registration under the
Securities Act, or in the event that they are not so registered, unless
(i) an exemption from the Securities Act registration requirements is
available thereunder, and (ii) the Employee has furnished the Company with
notice of such proposed transfer and the Company’s legal counsel, in its
reasonable opinion, shall deem such proposed transfer to be so
exempt.
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8. Miscellaneous.
8.1 Notices. All
notices, requests, deliveries, payments, demands and other communications that
are required or permitted to be given under this Agreement shall be in writing
and shall be either delivered personally or by private courier (e.g., Federal
Express), or sent by registered or certified mail, return receipt requested,
postage prepaid, to the parties at their respective addresses set forth herein,
or to such other address as either party shall have specified by notice in
writing to the other. Notice shall be deemed duly given hereunder
when delivered or mailed as provided herein.
8.2 Plan Paramount; Conflicts
with Plan. This Agreement shall, in all respects, be subject
to the terms and conditions of the Plan, whether or not stated
herein. In the event of a conflict between the provisions of the Plan
and the provisions of this Agreement, the provisions of the Plan shall in all
respects be controlling.
8.3 Waiver. The
waiver by any party hereto of a breach of any provision of this Agreement shall
not operate or be construed as a waiver of any other or subsequent
breach.
8.4 Entire
Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof. This
Agreement may not be amended except in writing executed by the Employee and the
Company.
8.5 Binding Effect;
Successors. This Agreement shall inure to the benefit of and
be binding upon the parties hereto and, to the extent not prohibited herein,
their respective heirs, successors, assigns and
representatives. Nothing in this Agreement, expressed or implied, is
intended to confer on any person other than the parties hereto and as provided
above, their respective heirs, successors, assigns and representatives any
rights, remedies, obligations or liabilities.
8.6 Governing
Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without regard to choice of
law provisions.
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8.7 Headings. The
headings contained herein are for the sole purpose of convenience of reference,
and shall not in any way limit or affect the meaning or interpretation of any of
the terms or provisions of this Agreement.
8.8 Section
409A. This Agreement is intended to comply with the provisions
of Section 409A of the Internal Revenue Code of 1986, as amended (“Section
409A”). To the extent that the Shares or any payments or benefits
provided hereunder are not considered compliant with Section 409A, the parties
agree that the Company shall take all actions necessary to make such payments
and/or benefits become compliant.
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IN
WITNESS WHEREOF, the parties hereto have signed this Agreement as of the day and
year first above written.
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EMPLOYEE
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FREDERICK’S
OF HOLLYWOOD GROUP INC.
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/s/ Xxxxxx Xxxxx
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By:
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/s/ Xxxxxx X. Xxxxx
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XXXXXX
XXXXX
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Xxxxxx
X. Xxxxx
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Chief
Executive Officer
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Address
of Employee:
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Address
of Company:
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0000
Xxxxxxxx
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Xxx
Xxxx, Xxx Xxxx 00000
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