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RESTRICTED STOCK AGREEMENT
THIS RESTRICTED STOCK AGREEMENT (as it may be amended from
time to time, the "Agreement"), dated as of June 1, 2002 (the "Grant Date"),
between Diamond Triumph Auto Glass, Inc., a Delaware corporation (the
"Company"), and Xxxxxx Xxxxxx ("Executive").
WITNESSETH:
Executive is a key employee of the Company; and
The Company desires to encourage Executive to remain employed
by the Company and to contribute to the success of the Company by transferring
to Executive shares of common stock of the Company, subject to the restrictions
and conditions contained in this Agreement.
In consideration of services to be rendered to the Company,
the payment by Executive to the Company of $263.66, representing the aggregate
par value of the Restricted Shares (as defined in Section 1), and the other
mutual covenants and agreements herein contained and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, and
intending to be legally bound hereby, the parties hereto agree as follows:
1. Sale of Restricted Shares. Subject to the terms and conditions
set forth in this Agreement, the Company hereby agrees to sell to Executive, and
Executive hereby agrees to purchase from the Company, a total of 26,366 shares
(the "Restricted Shares") of the Company's common stock, par value $0.01 per
share ("Common Stock"), for the consideration set forth above. Executive shall
deliver to the Company the amount of $263.66 by cash or check within five
business days following the date of the execution of this Agreement. For
purposes of this Agreement, "Restrictions" shall mean the restrictions and
conditions set forth in Section 2 and Section 3, as applicable, with respect to
the Restricted Shares and the Retained Distributions (as defined below). The
Company shall cause the Restricted Shares to be issued and a stock certificate
or certificates representing the Restricted Shares to be registered in the name
of Executive promptly upon execution of this Agreement, but the stock
certificate or certificates shall be delivered to, and held in custody by, the
Company until such time or times that the Restrictions have lapsed pursuant to
Section 3. On or before the date of execution of this Agreement, Executive shall
deliver to the Company one or more stock powers endorsed in blank relating to
the Restricted Shares, which will permit transfer to the Company of all or any
portion of the Restricted Shares and any securities constituting Retained
Distributions that shall be forfeited or that shall not become vested in
accordance with this Agreement.
2. Restrictions.
(a) Executive shall have all rights and privileges of a
stockholder of the Company with respect to the Restricted Shares, including
voting rights and the right to receive dividends paid with respect to such
shares, except that, until such time or times as the Restrictions have lapsed
pursuant to Section 3, the following provisions shall apply:
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(i) Executive shall not be entitled to delivery
of the certificate or certificates for any of the Restricted Shares until the
Restrictions have lapsed with respect thereto pursuant to Section 3;
(ii) The Company will retain custody of all cash
dividends and other distributions ("Retained Distributions") made or declared
with respect to the Restricted Shares (and such Retained Distributions will be
subject to the Restrictions and the other terms and conditions under this
Agreement that are applicable to the Restricted Shares) until such time, if
ever, as the Restricted Shares with respect to which such Retained Distributions
shall have been made, paid or declared shall have become vested, and such
Retained Distributions shall not bear interest or be segregated in separate
accounts;
(iii) The Restricted Shares may not be sold,
transferred, assigned, pledged or otherwise encumbered or disposed of by
Executive before the Restrictions have lapsed pursuant to Section 3; and
(iv) The Restricted Shares and Retained
Distributions shall be subject to forfeiture upon termination of Executive's
employment with the Company to the extent set forth in Section 3(d) and upon the
breach of any of the terms or conditions of this Agreement.
(b) Any attempt to dispose of Restricted Shares in a
manner contrary to the Restrictions or any other written agreement to which the
Company and the Executive are parties shall be ineffective.
3. When Restrictions Lapse.
(a) Subject to Sections 3(b), 3(c) and 3(d), the
Restricted Shares shall vest and the Restrictions shall lapse: (i) with respect
to 20% of the Restricted Shares on the Grant Date; (ii) with respect to 20% of
the Restricted Shares on the first anniversary of the Grant Date; (iii) with
respect to 20% of the Restricted Shares on the second anniversary of the Grant
Date; (iv) with respect to 20% of the Restricted Shares on the third anniversary
of the Grant Date; and (v) with respect to 20% of the Restricted Shares on the
fourth anniversary of the Grant Date; provided, in each case that Executive is
employed by the Company on such date. Each installment of Restricted Shares that
may become vested pursuant to Section 3(a)(i) - (v) shall be referred to herein
as an "Installment."
(b) Subject to Sections 3(c) and 3(d), Restricted Shares
shall fully vest and the Restrictions shall lapse with respect to all Restricted
Shares immediately prior to the first to occur of the following:
(i) The consummation (in one or a series of
transactions) of a sale by the Company of all or substantially all of its assets
or of a merger or reorganization having substantially the same effect (an "Asset
Sale"); or
(ii) The consummation of a sale of all or
substantially all of the outstanding shares of the Company's capital stock or of
a merger or reorganization having substantially the same effect (a "Change in
Control").
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The determination of whether a particular transaction (or series of
transactions) shall constitute an Asset Sale or a Change in Control shall be
made by the Board of Directors of the Company (the "Board") in its sole
discretion.
(c) In the event of the dissolution or liquidation of the
Company, any Restricted Shares that that had not theretofore vested shall
terminate immediately prior to the consummation of such proposed action, unless
otherwise provided by the Board.
(d) If Executive's employment with the Company is
terminated, any Restricted Shares that that have not theretofore vested shall
become vested as follows:
(i) If the Company terminates Executive's
employment without Cause (as such term is defined in Section 11.2 of that
certain Employment Agreement by and between Executive and the Company dated as
of June 1, 2002 (the "Employment Agreement")) or if Executive's employment with
the Company is terminated due to Executive's death or Disability (as such term
is defined in Section 11.3 of the Employment Agreement), then, effective
immediately prior to such termination of employment, the Restricted Shares shall
vest and the Restrictions shall lapse only with respect to any Installment that
would otherwise have become vested pursuant to Section 3(a) prior to the first
anniversary of the date of such termination of employment.
(ii) If Executive's employment with the Company
is terminated, either by Executive or the Company, for any reason other than as
set forth in Section 3(d)(i), then no Restrictions shall lapse with respect to
any Restricted Shares and no such Restricted Shares shall become vested
following the date of such termination of employment.
(iii) Any Restricted Shares that remain subject to
the Restrictions as of the effective date of Executive's termination of
employment (and that do not become vested pursuant to Section 3(d)(i)) shall
thereupon be forfeited without further action by the Company.
4. Issuance of Stock Certificates for Shares. The stock
certificate or certificates representing the Restricted Shares shall be issued
promptly following the execution of this Agreement and shall be delivered to the
Corporate Secretary or such other custodian as may be designated by the Company,
to be held by the Company until the Restrictions have lapsed under Section 3.
Such stock certificate or certificates shall bear the following (or
substantially equivalent) legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR THE SECURITIES LAWS OF ANY JURISDICTION. SUCH
SECURITIES MAY NOT BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED,
PLEDGED OR HYPOTHECATED EXCEPT PURSUANT TO (I) A REGISTRATION
STATEMENT WITH RESPECT TO SUCH SECURITIES THAT IS EFFECTIVE
UNDER SUCH ACT OR APPLICABLE STATE SECURITIES LAW, OR (II) ANY
EXEMPTION FROM REGISTRATION UNDER SUCH ACT, OR APPLICABLE
STATE
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SECURITIES LAW, RELATING TO THE DISPOSITION OF SECURITIES,
INCLUDING RULE 144, PROVIDED AN OPINION OF COUNSEL IS
FURNISHED TO THE COMPANY, IN FORM AND SUBSTANCE REASONABLY
SATISFACTORY TO THE COMPANY, TO THE EFFECT THAT AN EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND/OR
APPLICABLE STATE SECURITIES LAW IS AVAILABLE. THE SECURITIES
REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND
CONDITIONS (INCLUDING FORFEITURE) OF (X) A RESTRICTED STOCK
AGREEMENT ENTERED INTO BETWEEN THE EXECUTIVE AND THE COMPANY
AND (Y) A MANAGEMENT SUBSCRIPTION AND STOCKHOLDERS AGREEMENT
DATED AS OF MARCH 31, 1998, AS AMENDED, AMONG THE EXECUTIVE,
GREEN EQUITY INVESTORS II, L.P., AND THE COMPANY, A COPY OF
EACH OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY,
AND THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE
TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR
OTHERWISE DISPOSED OF UNLESS SUCH TRANSFER, SALE, ASSIGNMENT,
PLEDGE, HYPOTHECATION OR OTHER DISPOSITION COMPLIES WITH THE
PROVISIONS OF SUCH AGREEMENTS.
Once the Restrictions have lapsed with respect to any portion of the Restricted
Shares, upon the written request of Executive, a stock certificate or
certificates for such portion of the Restricted Shares shall be returned and
exchanged for new stock certificates without the foregoing legend for the newly
vested portion of the Restricted Shares (although such certificates make bear
such other legend(s) as the Company may deem to be necessary or appropriate).
Upon the written request of Executive, the certificates representing the newly
vested shares shall be delivered to Executive (or to the person to whom the
rights of Executive shall have passed by will or the laws of descent and
distribution) promptly after the date on which the Restrictions have lapsed but
not before Executive has made any tax payment to the Company or made other
arrangements for tax withholding, as required by Section 5(a). Once the
Restrictions have lapsed with respect to all of the Restricted Shares, all
certificates held by the Company representing the vested shares shall be
delivered promptly to Executive (or to the person to whom the rights of
Executive shall have passed by will or the laws of descent and distribution),
provided that Executive has made any tax payment to the Company or made other
arrangements for tax withholding, as required by Section 5(a).
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5. Taxation.
(a) Whenever the Restrictions lapse with respect to some
or all of the Restricted Shares pursuant to Section 3, the Company shall notify
Executive of the amount of any tax which must be withheld by the Company under
all applicable federal, state and local tax laws. Executive agrees to make
arrangements with the Company to (i) remit a cash payment of the required amount
to the Company or (ii) to authorize the deduction of such amount from
Executive's compensation.
(b) Executive has reviewed with his own tax advisors the
federal, state, local and foreign tax consequences of the transactions
contemplated by this Agreement. Executive is relying solely on such advisors and
not on any statements of the Company or any of its agents. Executive understands
that he (and not the Company) shall be responsible for his own tax liability
that may arise as a result of the transactions contemplated by this Agreement.
Executive understands that it may be beneficial in certain circumstances to
elect to be taxed as of the Grant Date rather than when the Restrictions lapse
by filing an election under Section 83(b) of the Internal Revenue Code of 1986,
as amended (the "Code"), with the Internal Revenue Service within 30 days from
the Grant Date. EXECUTIVE ACKNOWLEDGES THAT IT IS HIS RESPONSIBILITY AND NOT THE
COMPANY'S TO TIMELY FILE THE ELECTION UNDER SECTION 83(b) OF THE CODE, EVEN IF
HE REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON HIS
BEHALF. Executive acknowledges that nothing in this Agreement constitutes tax
advice.
6. Securities Laws. The Company may from time to time impose any
conditions on the transfer of the Restricted Shares as it deems necessary or
advisable to ensure that any transfers of the Restricted Shares granted
hereunder will satisfy the applicable requirements of federal and state
securities laws. Such conditions to satisfy applicable federal and state
securities laws may include, without limitation, the partial or complete
suspension of the right to transfer the Restricted Shares until the Restricted
Shares have been registered under the Securities Act of 1933 as amended, or
until such transfer may, in the opinion of counsel acceptable to the Company, be
made without registration pursuant to an applicable exemption therefrom.
Executive hereby represents, warrants and agrees as follows, and acknowledges
that the Company is relying on the same in issuing, the Restricted Shares:
(a) Executive is entering into this Agreement solely on
the basis of his own familiarity with the Company and all relevant factors about
the Company's affairs and the Company has not made any express or implied
representations, covenants or warranties to Executive with respect to such
matters.
(b) Executive has read this Agreement and has been
advised or has had the opportunity to be advised by his own legal counsel as to
the consequences of entering into this Agreement.
(c) Executive has had access to all documents, records
and books pertaining to the Company or in any way relevant to the investment in
the Restricted Shares and has the opportunity to ask questions of, and receive
answers from, the Company and its officers and
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directors concerning the terms and conditions of the transactions contemplated
by this Agreement and the merits and risks of an investment in the Restricted
Shares.
(d) Executive has knowledge and experience in financial
and business matters so as to be capable of evaluating the merits and risks of
an investment in the Restricted Shares.
(e) Executive is acquiring the Restricted Shares for his
own account with investment intent and not with a view to the resale or
distribution of all or any part of such shares.
(f) Executive agrees that the Company may impose
additional restrictions on the sale, pledge or other transfer of the Restricted
Shares if, in the sole discretion of the Company and its counsel, such
restrictions are necessary and desirable in order to achieve compliance with the
provisions of federal or state securities laws.
(g) Executive is an "accredited investor," as defined in
Rule 501(a) under the Securities Act of 1933, as amended.
7. No Effect on Employment. Neither this Agreement nor the
Restricted Shares granted hereunder shall confer upon Executive any right to
continued employment with the Company or any subsidiary thereof, and shall not
in any way modify or restrict the Company's or such subsidiary's right to
terminate such employment.
8. Adjustments. If the outstanding shares of the Common Stock of
the Company are increased, decreased, changed into or exchanged for a different
number of kind of shares or securities of the Company through (a) a distribution
or payment of a dividend on the Common Stock in shares of Common Stock, (b)
subdivision of reclassification, in a stock split or similar transaction, of the
outstanding shares of Common Stock into a greater number of shares, (c)
combination or reclassification of, in a reverse stock split or similar
transaction, the outstanding shares of Common Stock into a lesser number of
shares, or (d) issuance of any shares of capital stock by reclassification of
the Common Stock, then an appropriate and proportionate adjustment shall be made
in the number and kind of Restricted Shares. Adjustments made pursuant to this
Section 8 shall be made by the Board, whose determination as to what adjustments
shall be made, and the extent thereof, shall be final, binding and conclusive.
9. Notices. All notices or other communications under this
Agreement shall be given in writing and shall be deemed duly given and received
on the third full business day following the day of the mailing thereof by
registered or certified mail or when delivered personally or sent by facsimile
transmission as follows:
(a) If to the Company, at its principal executive offices
at the time of the giving of such notice, or at such other place as the Company
shall have designated by notice as herein provided to the Executive, Attention:
Co-Chairmen of the Board; and
(b) If to the Executive at the address of the Executive
as it appears in the Company's records or at such other place as the Executive
shall have designated by notice as herein provided to the Company.
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10. Administration. The Board shall have the power to interpret
this Agreement and to adopt such rules for the administration, interpretation
and application of the Restricted Shares as are consistent therewith and to
interpret, amend or revoke any such rules. All actions taken and all
interpretations and determinations made by the Board in good faith shall be
final and binding upon Executive, the Company and all other interested persons.
No member of the Board shall be personally liable for any action, determination
or interpretation made in good faith with respect to the Restricted Shares.
11. Miscellaneous.
(a) This writing constitutes the entire agreement of the
parties with respect to the subject matter hereof and may not be modified or
amended except by a written agreement signed by the Company and Executive.
(b) No waiver of any breach or default hereunder shall be
considered valid unless in writing, and no such waiver shall be deemed a waiver
of any subsequent breach or default of the same or similar nature.
(c) Except as otherwise expressly provided herein, this
Agreement shall be binding upon and inure to the benefit of the Company and its
successors and assigns and the Executive and his heirs and personal
representatives.
(d) If any provision of this Agreement shall be invalid
or unenforceable, such invalidity or unenforceability shall attach only to such
provision and shall not in any manner affect or render invalid or unenforceable
any other severable provision of this Agreement, and this Agreement shall be
carried out as if any such invalid or unenforceable provision were not contained
herein.
(e) The section headings contained herein are for the
purposes of convenience only and are not intended to define or limit the
contents of said sections. Except as may otherwise be expressly provided, all
references herein to "Section" or "Sections" shall mean the applicable section
or sections of this Agreement.
(f) Words in the singular shall be read and construed as
though in the plural and words in the plural shall be read and construed as
though in the singular in all cases where they would so apply.
(g) This Agreement may be executed in one or more
counterparts, all of which taken together shall be deemed one original.
(h) This Agreement shall be deemed to be a contract under
the laws of the State of New York and for all purposes shall be construed and
enforced in accordance with the internal laws of said state without regard to
the principles of conflicts of law.
[signature page follows]
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IN WITNESS WHEREOF, the parties have executed this Agreement
on the date and year first above written.
DIAMOND TRIUMPH AUTO GLASS, INC.
By: /s/ Xxxxxxx Xxxxxx
------------------------------
Name: Xxxxxxx Xxxxxx
Title: Co-Chairman
/s/ Xxxxxx Xxxxxx
---------------------------------
Xxxxxx Xxxxxx
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