TRANS WORLD ENTERTAINMENT
CORPORATION
RESTRICTED STOCK AGREEMENT
This RESTRICTED STOCK AGREEMENT, dated as of May 1, 1996 (the "Agreement"), is
made by and between Trans World Entertainment Corporation, a New York
Corporation (the "Company"), and Xxxx X. Xxxxxxxx (the "Employee").
WHEREAS, the Employee has been designated by the Compensation Committee of
the Company's Board of Directors (the "Committee") to participate in the Trans
World Entertainment Corporation 1990 Restricted Stock Plan (the "Plan"), a
copy of which the Employee acknowledges receipt of.
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, the parties agree as follows:
Capitalized terms used herein and not defined shall have the meanings set
forth in the Plan.
1. Award of Shares. Pursuant to the provisions of the Plan, the terms of
which are incorporated herein by reference, the Employee is hereby awarded
25,000 shares of Restricted Stock (the "Award") on and made expressly subject
to the terms and conditions herein set forth.
2. Terms and Conditions. It is understood and agreed that the Award
evidenced hereby is subject to the following terms and conditions:
(a) Vesting of Award. Subject to the other terms and conditions of this
Agreement and the Plan, this Award shall become vested in three installments,
expressly conditioned on complete years of continuous employment (such yearly
periods to be measured beginning April 30, 1996): 20% of the shares of
Restricted Stock subject to the Award shall become vested April 30, 1999; an
additional 20% shall become vested on April 30, 2000, and the final 60% shall
become vested on April 30, 2001; provided, however, that, in accordance with
and subject to the Plan, the Committee may in its discretion accelerate the
vesting of the Award and/or remove any restrictions relating thereto.
(b) Vesting on Death or Disability. In the event the Employee's employment
with the Company is terminated prior to the lapse of the restrictions on his
Award by reason of death, Permanent Disability, or Retirement, the Restricted
Stock awarded hereunder shall vest in the name of the Employee as of the date
of such termination as to the full number of shares of Restricted Stock
awarded hereunder.
(c) Forfeiture of Unvested Shares. In the event of the termination of the
Employee's employment with the Company for any reason whatsoever, all shares
of Restricted Stock subject to the Award that have not vested in accordance
with Section 2(a) or 2(b) above shall be forfeited by the Employee and become
the property of the Company. If the Restricted Stock is forfeited, the
Company shall be entitled to have the certificates representing the shares of
Restricted Stock redelivered to it out of the escrow provided for in Section
2(d) hereof.
(d) Certificates. Each certificate issued in respect of Restricted Stock
awarded hereunder shall be deposited in escrow with the Company or its
designee, selected by the Company in the Company's sole discretion, together
with a stock power executed in blank by the Employee, and shall bear a legend
disclosing the restrictions on transferability imposed on such Restricted
Stock by this Agreement. Upon the vesting of Restricted Stock pursuant to
Section 2(a) or 2(b) hereof and the satisfaction of any withholding tax
liability pursuant to Section 5 hereof, the certificates evidencing such
vested Restricted Stock shall be delivered to the Employee.
(e) Rights of a Shareholder. Subject to Section 3 hereof, prior to the
time a share of Restricted Stock is fully vested hereunder, the Employee shall
have all the rights of a shareholder of the Company, including the right to
vote such shares of Restricted Stock: provided, however, that unless and
until the vesting restrictions and other terms and conditions applicable to
such Restricted Stock shall be held by the Company for the Employee's account,
and interest may be paid on any such dividends, at a rate and subject to such
terms as determined by the Committee in its sole and absolute discretion. If
Restricted Stock is forfeited pursuant to the terms of this Agreement, the
related dividends and interest, if any, shall likewise be forfeited to the
Company.
(f) No Right to Continued Employment. Neither the Plan, this Agreement, this
Award nor any other action taken pursuant to the Plan shall constitute or be
evidence of any agreement or understanding, express or implied, that the
Employee has a right to continue as an Employee for any period of time, or at
any rate of compensation, and shall not in any way interfere with the right of
the Company to terminate the Employee's employment at any time.
3.Restrictions on Transfer of Shares. Neither the shares of Restricted Stock
delivered hereunder nor any interest in them may be sold, assigned, disposed
of, pledged, hypothecated, encumbered or in any other manner transferred, in
whole or in part, until the vesting provisions herein and in the Plan have
been satisfied, and thereafter only if all of the following conditions have
been satisfied:
(a) The listing, or approval for listing upon notice of issuance, that may be
required of such shares on any securities exchange as may at the time be the
principal market for the shares;
(b) Any registration or other qualification of such shares under any state or
federal law or regulation, or the maintaining in effect of any such
registration or other qualification or an exemption therefrom supported by an
opinion of counsel, which the board of directors shall, in its absolute
discretion upon the advice of counsel, deem necessary or advisable, including
expiration of any requisite holding period under Rule 144 under the Securities
Act of 1933, as amended (the "Securities Act"); and
(c) The obtaining of any other consent, approval or permit for any state or
federal governmental agency which the board of directors shall, in its
absolute discretion based upon the advice of counsel, determine to be
necessary or advisable.
4. Legend on Restricted Stock. All certificates representing shares of
Restricted Stock, unless such shares are registered under the Securities Act,
shall bear the following legend or such other legend as the Company deems
appropriate:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED WITH
THE SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933 AND
MAY NOT BE OFFERED OR SOLD IN THE ABSENCE OF SUCH REGISTRATION OR THE
AVAILABILITY OF AN EXEMPTION FROM SUCH REGISTRATION.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS AND VESTING CONDITIONS SET FORTH IN A RESTRICTED STOCK AGREEMENT
MAINTAINED WITH THE SECRETARY OF THE COMPANY.
Any certificate issued at any time in exchange or substitution for any
certificate bearing such legend or such other legend deemed appropriate by the
Company shall also bear such legend unless, in the opinion of counsel for the
Company, the securities represented thereby need no longer be subject to the
restriction contained herein. The provisions of this Section 4 shall be
binding upon all subsequent holders of certificates bearing the above legend.
5. Acquisition for Investment. The Employee represents and warrants that he
is acquiring the shares of Restricted Stock distributed hereby as an
investment and not with a view to distribution thereof. The Company also
reserves the right to place legend or other symbol on the share certificates
issued or transferred pursuant to this Agreement and the Plan and to furnish
any stop transfer or similar instructions to the transfer agent for its shares
with the Company, in its sole discretion, may deem necessary and proper to
ensure compliance with the above representation and warranty.
6. Adjustment Provisions. If the shares of Common Stock outstanding are
changed, such that its effect in any fiscal year is greater than 5% of the
Company's Common Stock capitalization, in number or class, by reason of a
split-up, merger, consolidation, reorganization, reclassification,
recapitalization, or any capital adjustment, including a stock dividend, or
other similar change is made in the corporate structure, appropriate
adjustments shall be made in the aggregate number and kind of shares or the
securities or property subject to this Agreement and the Plan.
7. Withholding. The Employee agrees that there shall be deducted from any
distribution of Restricted Stock under this Agreement the amount of any tax
required by any governmental authority to be withheld and paid over by the
Company to such governmental authority for the account of the Employee. With
respect to any distribution of Restricted Stock, the Company shall have the
right to sell without notice, such number of shares of the Restricted Stock,
distributable to the Employee as will provide funds for the payment of any tax
so required to be paid by the Company for the Employee's account, unless prior
to such sale, the Employee shall have paid to the Company the amount of such
tax. Any balance of the proceeds of such sale shall be paid to the Employee.
In effecting any such sale, the Company shall be deemed to be acting on
behalf, and for the account of, the Employee.
8. Designation of Beneficiary. The Employee may, with the consent of the
Committee, designate a person or persons to receive, in the event of his
death, any shares of Restricted Stock distributable hereunder. Such
designation shall be made upon forms supplied by and delivered to the Company
and may be revoked in writing. If the Employee fails effectively to designate
a beneficiary, then his estate shall be deemed to be his beneficiary.
9. References. References herein to rights and obligations of the Employee
shall apply, where appropriate, to the Employee's legal representative,
designated beneficiary or estate without regard to whether specific reference
to such legal representative, designated beneficiary or estate is contained in
a particular provision of this Agreement.
10. Notices. Any notice required or permitted to be given under this
Agreement shall be in writing and shall be deemed to have been given when
delivered personally or by courier, or sent by certified or registered mail,
postage prepaid, return receipt requested, duly addressed to the party
concerned at the address indicated below or to such changed address as such
party may subsequently by similar process give notice of:
If to the Company: If to the Employee:
Trans World Entertainment Corporation Xxxx X. Xxxxxxxx
00 Xxxxxxxxx Xxxxxx 00 Xxxxxxx Xxxx
Xxxxxx, Xxx Xxxx 00000 Xxxxxx, Xxx Xxxx 00000
Attn.: Secretary
11. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without regard to its
principles regarding conflict of laws.
12. Counterparts. This Agreement may be executed in two counterparts each of
which shall constitute one and the same instrument.
13. Severability. If any provision or any term or condition of this
Agreement or any application thereof to any person or circumstances is
invalid, such provision, term, condition, or application shall to that extent
be void (or, in the discretion of the Committee, such provision, term or
condition may be amended to avoid such invalidity), and shall not affect other
provisions, terms or conditions or applications thereof, and to this extent
such provisions, terms and conditions are severable.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first set forth above.
TRANS WORLD ENTERTAINMENT EMPLOYEE
CORPORATION
By:
/s/Xxxxxx X. Xxxxxxx /s/ Xxxx X. Xxxxxxxx
____________________________________ ____________________________
Xxxxxx X. Xxxxxxx, Chairman, President Xxxx X. Xxxxxxxx
and Chief Executive Officer SS# ###-##-####
