Exhibit 5
BARNEYS NEW YORK, INC.
RESTRICTED STOCK AWARD AGREEMENT
FEBRUARY 2, 2003
SECTION 1. GRANT OF STOCK AWARD.
(a) STOCK AWARD. On the terms and conditions set forth in this Agreement,
Barneys New York, Inc. ("COMPANY") hereby grants to Xxxxxx Xxxxx ("Grantee") a
restricted stock award equal to 200,000 shares of common stock ("GRANTED
SHARES"), par value $.01 per share, of the Company upon the terms set forth
herein.
(b) DEFINED TERMS. Capitalized terms not otherwise defined herein (including
Section 7 hereof) shall have the meaning set forth in the Employment Agreement
dated January 8, 2001, as amended as of December 2, 2002, between the Company
and Grantee ("EMPLOYMENT AGREEMENT").
SECTION 2. ISSUANCE OF SHARES
(a) STOCK CERTIFICATES. The Company shall cause to be issued a certificate or
certificates for the Granted Shares representing this award, registered in the
name of the Grantee.
(b) STOCKHOLDER RIGHTS. Until such time as the Company exercises the Right of
Repurchase, the Grantee (or any successor in interest) shall have all the rights
of a stockholder (including, without limitation, voting, dividend and
liquidation rights) with respect to the Granted Shares, subject, however, to the
restrictions of this Agreement.
(c) ESCROW. For so long as Granted Shares are subject to the Right of
Repurchase, the Company shall cause such certificate or certificates to be
deposited in escrow. The Grantee shall deliver to the Company a duly-executed
blank stock power (in the form attached hereto as Exhibit A). All regular cash
dividends paid on Granted Shares shall be held in escrow and shall be paid to
the Grantee as the Restricted Shares are no longer subject to the Right of
Repurchase. Granted Shares together with any other assets or securities held in
escrow hereunder, shall be (i) surrendered to the Company for repurchase and
cancellation upon the Company's exercise of its Right of Repurchase, or (ii)
released to the Grantee to the extent the Granted Shares are not Restricted
Shares. In any event, all Granted Shares which have vested (and any other vested
assets and securities attributable thereto) shall be released promptly following
the date the Grantee's Service terminates. Any new, substituted or additional
securities or other property described in Sections 4(e) and 5(e) below shall be
immediately delivered to the Company to be held in escrow, but only to the
extent the related Shares are at the time Restricted Shares.
(d) SECTION 83(B) ELECTION. Section 83 of the Code provides that the Grantee is
not subject to federal income tax until the Right of Repurchase with respect to
the Granted Shares lapses. If the Grantee chooses, the Grantee may make an
election under Section 83(b) of the Code, which would cause the Grantee to
recognize income in the amount of the Fair Market Value of the Granted Shares
(determined as of the date of the award). A Section 83(b) election must be filed
with the Internal Revenue Service within thirty (30) days after the date of this
award. THE FORM FOR MAKING A SECTION 83(B) ELECTION IS ATTACHED AS EXHIBIT B.
THE GRANTEE ACKNOWLEDGES THAT IT IS THE GRANTEE'S SOLE RESPONSIBILITY TO TIMELY
FILE THE SECTION 83(B) ELECTION IF HE CHOOSES AND THAT FAILURE TO FILE A SECTION
83(B) ELECTION WITHIN THE APPLICABLE THIRTY (30) DAY PERIOD MAY RESULT IN THE
RECOGNITION OF ORDINARY INCOME WHEN THE RIGHT OF REPURCHASE LAPSES.
(e) WITHHOLDING REQUIREMENTS. The Company may withhold any tax (or other
governmental obligation) as a result of the grant of this award and/or the
filing of a Section 83(b) election as a condition to the grant of this award,
and the Grantee shall make arrangements satisfactory to the Company to enable it
to satisfy all such withholding requirements.
SECTION 3. SECURITIES LAW ISSUES.
(a) SECURITIES NOT REGISTERED. The Granted Shares have not been registered under
the Securities Act and are being issued to the Grantee in reliance upon the
exemption for grants made to executive officers of the Company under Section
4(2) of the Securities Act.
(b) GRANTEE REPRESENTATIONS. The Grantee hereby confirms that he or she has been
informed that the Granted Shares are restricted securities under the Securities
Act and that the Granted Shares may not be resold or transferred unless they are
first registered under the Securities Act or unless an exemption from such
registration is available. Accordingly, the Grantee hereby represents and
acknowledges as follows:
(i) The Granted Shares are being acquired by Grantee for his
own account, for investment, and not with a view to sale or
distribution thereof;
(ii) The Grantee is familiar with the provisions of Rule 144
promulgated under the Securities Act, which exempts certain
resales of securities subject, among other things, to
certain volume and holding period requirements.
(iii) The Grantee further acknowledges that he is an
"accredited investor" within the meaning of Rule 501 of
the Regulation D promulgated under the Securities Act.
(c) REGISTRATION RIGHTS. The Company and the Grantee acknowledge that the
Granted Shares shall be deemed "Registrable Securities" pursuant to the
Registration Rights Agreement dated January 8, 2001, between the Company and the
Grantee.
(d) TRANSFEREE OBLIGATIONS. Each person (other than the Company) to whom the
Granted Shares are transferred by means of a permitted transfer must, as a
condition precedent to the validity of such transfer, acknowledge in writing to
the Company that such person is bound by the provisions of this Agreement and
that the transferred Granted Shares are subject to the Right of Repurchase to
the same extent such shares would be so subject if retained by the Grantee.
(e) PERMITTED TRANSFERS. Sections 3(c), 4(a) and 5(a) shall not apply to any of
the following permitted transfers: (i) a transfer by beneficiary designation,
will or intestate succession or (ii) a transfer to the Grantee's spouse,
2
children or grandchildren (or their issue) or to a trust established by the
Grantee for the benefit of the Grantee or the Grantee's spouse, children or
grandchildren (or their issue), provided in either case that the Transferee
agrees in writing on a form prescribed by the Company to be bound by all
provisions of this Agreement. If the Grantee transfers any Shares acquired under
this Agreement, either under this Subsection or after the Company has failed to
exercise the Right of Repurchase, then such rights shall be applicable to the
Transferee to the same extent as to the Grantee.
(f) LEGENDS. All certificates evidencing Granted Shares shall bear the following
legends:
"THE SHARES REPRESENTED HEREBY MAY NOT BE SOLD, ASSIGNED,
TRANSFERRED, ENCUMBERED OR IN ANY MANNER DISPOSED OF, EXCEPT IN
COMPLIANCE WITH THE TERMS OF A WRITTEN AGREEMENT BETWEEN THE COMPANY
AND THE REGISTERED HOLDER OF THE SHARES (OR THE PREDECESSOR IN
INTEREST TO THE SHARES). SUCH AGREEMENT GRANTS TO THE COMPANY CERTAIN
REPURCHASE RIGHTS. THE SECRETARY OF THE COMPANY WILL UPON WRITTEN
REQUEST FURNISH A COPY OF SUCH AGREEMENT TO THE HOLDER HEREOF WITHOUT
CHARGE."
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT
BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN
EFFECTIVE REGISTRATION THEREOF UNDER THE ACT COVERING SUCH
SECURITIES, THE SAME IS MADE IN ACCORDANCE WITH RULE 144 UNDER THE
ACT OR THE COMPANY RECEIVES AN OPINION OF COUNSEL, SATISFACTORY TO
THE COMPANY STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR
HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY
REQUIREMENTS OF THE ACT."
(g) REMOVAL OF LEGENDS. If, in the opinion of the Company, any legend placed on
a stock certificate representing Granted Shares is no longer required, the
holder of such certificate shall be entitled to exchange such certificate for a
certificate representing the same number of shares but without such legend.
(h) ADDITIONAL RESTRICTIONS. Regardless of whether the offering and sale of
Shares under the Plan have been registered under the Securities Act or have been
registered or qualified under the securities laws of any state, the Company at
its discretion may impose restrictions upon the sale, pledge or other transfer
of such Shares (including the placement of appropriate legends on stock
certificates or the imposition of stop-transfer instructions) if, in the
judgment of the Company, such restrictions are necessary or desirable in order
to achieve compliance with the Securities Act or the securities laws of any
state or any other law.
(i) GRANTEE UNDERTAKING. The Grantee agrees to take whatever additional action
and execute whatever additional documents the Company may deem necessary or
advisable to carry out or effect one or more of the obligations or restrictions
imposed on either the Grantee or upon the Restricted Shares pursuant to the
provisions of this Agreement.
3
(j) ADMINISTRATION. Any determination by the Company in connection with any of
the matters set forth in this Section 3 shall be conclusive and binding on the
Grantee and all other persons.
SECTION 4. RIGHT OF REPURCHASE.
(a) RIGHT OF REPURCHASE. Unless the Granted Shares have become completely vested
in accordance with the terms hereof, the Granted Shares initially shall be
Restricted Shares and shall be subject to a right (but not an obligation) of
repurchase by the Company. The Grantee shall not transfer, assign, encumber or
otherwise dispose of any Restricted Shares, except transfers permitted under
Section 3(e) hereof. If the Grantee transfers any Restricted Shares, then this
Section 4 shall apply to the Transferee to the same extent as to the Grantee.
(b) EXERCISE NOTICE. In the event the Company wishes to exercise its Right of
Repurchase, the Company shall provide the Grantee with sixty (60) days prior
written notice of its intent to exercise its right. A sample Right of Repurchase
Exercise Notice is attached hereto as Exhibit C. Such notice shall contain the
purchase price for the Shares being repurchased which shall be One Dollar ($1)
in the aggregate for all such Shares, and all other terms and conditions of the
offer (including, without limitation, the proposed consummation date of the
repurchase). The purchase price shall be paid in cash or by cancellation of
indebtedness as the Company, in its sole discretion, shall determine.
(c) LAPSE OF REPURCHASE RIGHT. The Right of Repurchase shall lapse with respect
to the one-half of the Granted Shares on January 31, 2004 and the remaining half
of the Granted Shares on January 31, 2005, provided in each case the Grantee has
not terminated his Service prior to such date. In addition, the Right of
Repurchase shall lapse and all of the remaining Restricted Shares shall become
vested if (i) the Company is subject to a Change in Control before the Grantee's
Service terminates or (ii) the Grantee's Service is terminated by the Company
without Cause or by the Grantee for Good Reason. In addition, upon Grantee's
termination of Service by reason of his death or Disability in accordance with
the Employment Agreement, the Right of Repurchase shall lapse with respect to a
number of the Restricted Shares determined by multiplying (i) the number of
shares as to which the Right of Repurchase would have lapsed on the next
following January 31 after the date of termination of Service by (ii) a fraction
the numerator of which is the number of days since the preceding January 31st or
the Effective Date, whichever is later ("Beginning Date"), up to and including
the date of Executive's death or Disability and the denominator of which is the
number of days from the Beginning Date through January 31 next following the
date of Executive's death or disability.
(d) REPURCHASE PRICE. If the Company exercises the Right of Repurchase, it shall
pay the Grantee an amount for all of the Restricted Shares being repurchased
equal to One Dollar ($1) in the aggregate.
(e) ADDITIONAL SHARES OR SUBSTITUTED SECURITIES. In the event of the declaration
of a stock dividend, the declaration of an extraordinary dividend payable in a
form other than stock, a spin-off, a stock split, an adjustment in conversion
ratio, a recapitalization or a similar transaction affecting the Company's
outstanding securities without receipt of consideration, any new, substituted or
additional securities or other property (including money paid other than as an
4
ordinary cash dividend) which are by reason of such transaction distributed with
respect to any Shares subject to this Section 4 or into which such Shares
thereby become convertible shall immediately be subject to this Section 4.
(f) TERMINATION OF RIGHTS AS STOCKHOLDER. If the Company makes available, at the
time and place and in the amount and form provided in this Agreement, the
consideration for the Shares to be purchased in accordance with this Section 4,
then after such time the person from whom such Shares are to be purchased shall
no longer have any rights as a holder of such Shares (other than the right to
receive payment of such consideration in accordance with this Agreement). Such
Shares shall be deemed to have been purchased in accordance with the applicable
provisions hereof, whether or not the certificate(s) therefor have been
delivered as required by this Agreement.
SECTION 5. MISCELLANEOUS PROVISIONS.
(a) NO RETENTION RIGHTS. Nothing in this award shall confer upon the Grantee any
right to continue in Service for any period of specific duration or interfere
with or otherwise restrict in any way the rights of the Company or of the
Grantee, which rights are hereby expressly reserved by each, to terminate his or
her Service at any time and for any reason, with or without cause, subject
however to the Employment Agreement.
(b) NOTIFICATION. Any notification required by the terms of this Agreement shall
be given in writing and shall be deemed effective upon personal delivery or upon
deposit with the United States Postal Service, by registered or certified mail,
with postage and fees prepaid. A notice shall be addressed to the Company at its
principal executive office and to the Grantee at the address that he or she most
recently provided to the Company.
(c) ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between
the parties hereto with regard to the subject matter hereof and supersedes any
other agreements which relate to the subject matter hereof.
(d) WAIVER. The failure of the Company in any instance to exercise the Right of
Repurchase shall not constitute a waiver of any other repurchase rights that may
subsequently arise under the provisions of this Agreement or any other agreement
between the Company and the Grantee. No waiver of any breach or condition of
this Agreement shall be deemed to be a waiver of any other or subsequent breach
or condition whether of like or different nature.
(e) ASSIGNMENT. The Company may assign the Right of Repurchase to any person or
entity selected by the Board of Directors, including, without limitation, one or
more stockholders of the Company.
(f) SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall inure to the
benefit of, and be binding upon, the Company and its successors and assigns and
upon the Grantee, the Grantee's assigns and the legal representatives, heirs and
legatees of the Grantee's estate, whether or not any such person shall have
become a party to this Agreement and have agreed in writing to be join herein
and be bound by the terms hereof.
5
(g) CHOICE OF LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York, as such laws are applied to
contracts entered into and performed in such State.
SECTION 6. DEFINITIONS.
(a) "AGREEMENT" shall mean this Stock Award Agreement.
(b) "RESTRICTED SHARE" shall mean a Share that is subject to a Right of
Repurchase.
(c) "RIGHT OF REPURCHASE" shall mean the Company's right of repurchase described
in Section 4 of this Agreement.
(d) "SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
(e) "SERVICE" shall mean service as an employee of the Company or any of its
subsidiaries. For any purpose under this Agreement, Service shall be deemed to
continue while the Grantee is on a bona fide leave of absence, if such leave was
approved by the Company in writing or if continued crediting of Service for such
purpose is expressly required by the terms of such leave or by applicable law
(as determined by the Company).
(f) "SHARE" shall mean one share of common stock of the Company, with a par
value of $.01 per share.
(g) "TRANSFEREE" shall mean any person to whom the Grantee has directly or
indirectly transferred any Granted Share.
This Agreement has been executed as of the day and year first above written.
BARNEYS NEW YORK, INC.
By: /s/ Xxxx X. Xxxxxxxxx
--------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Executive Vice President
/s/ Xxxxxx Xxxxx
-------------------------------
XXXXXX XXXXX
6
EXHIBIT A
STOCK POWER
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
Barneys
New York, Inc. (the "Company"),________________________________________________
(_________________) shares of the common stock, par value $.01 per share, of the
Company standing in his name on the books of the Company represented by
Certificate No. ________________herewith and does hereby irrevocably constitute
and appoint_________________________________ his attorney-in-fact, with full
power of substitution, to transfer such shares on the books of the Company.
Dated: ________________, 20____ Signature:
----------------------------------
Xxxxxx Xxxxx
INSTRUCTIONS: Please do not fill in any blanks other than the signature
line and printed name and mailing address. Please print
your name exactly as you would like your name to appear on
the issued stock certificate. The purpose of this
assignment is to enable the Company to exercise the
Repurchase Right without requiring additional signatures on
your part.
EXHIBIT B
SECTION 83(B) ELECTION
This statement is being made under Section 83(b) of the Internal Revenue Code,
pursuant to Treas. Reg. Section 1.83-2.
(1) The taxpayer who performed the services is:
Name: Xxxxxx Xxxxx
Address:
----------------------------------------------
New York, New York
Social Security Number:
---------------------------------------------
(2) The property with respect to which the election is being made is
_________ shares of the common stock, par value $.01 per share,
of Barneys New York, Inc.
(3) The property was issued on February 2, 2003.
(4) The taxable year in which the election is being made is the calendar
year 2003.
(5) The property is subject to a right of repurchase pursuant to which
the issuer has the right to acquire the property in the aggregate for
$1 in the event of the taxpayer's resignation without good reason or
termination for cause at any time prior to the vesting date. The
issuer's repurchase right lapses in a series of installments over an
approximately two-year period ending on January 31, 2005.
(6) The fair market value at the time of transfer (determined without
regard to any restriction other than a restriction which by its terms
will never lapse) is $___________ per share.
(7) No amount was paid for such property.
(8) A copy of this statement was furnished to Barneys New York, Inc. for
whom taxpayer rendered the services underlying the transfer of
property.
(9) This statement is executed on February ___, 2003.
------------------------------------- -------------------------------------
Spouse (if any) Taxpayer
This election must be filed with the Internal Revenue Service Center with which
taxpayer files his or her Federal income tax returns and must be made within
thirty (30) days after the execution date of the Notice of Stock Award. This
filing should be made by registered or certified mail, return receipt requested.
You should retain two (2) copies of the completed form for filing with your
Federal and state tax returns for the current tax year and an additional copy
for your records.
EXHIBIT C
RIGHT OF REPURCHASE
EXERCISE NOTICE
[Date]
Xxxxxx Xxxxx
Barneys New York, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Exercise of Right of Repurchase
Dear Xxxxxx:
Barneys New York, Inc. (the "Company") wishes to exercise its right of
repurchase pursuant to that certain Restricted Stock Award Agreement dated
February 2, 2003 between the Company and you (the "Restricted Stock Award
Agreement") and buy back from you all shares of common stock of the Company
granted under such agreement to you and as to which such right of repurchase has
not lapsed. As provided in the Restricted Stock Award Agreement, the Company
shall pay you ONE DOLLAR ($1.00) in the aggregate for all shares being
repurchased hereunder.
Shares shall be repurchased on [insert date]. The Company shall pay the
repurchase price to you by delivery of payment in cash or by check on or within
two (2) days following such date. Once the payment is made available to you, you
shall no longer be considered a stockholder with respect to those shares.
Should you have any additional questions, please contact [insert contact person
and contact information].
Very truly yours,
