EXHIBIT 10.2
RESTRICTED STOCK AGREEMENT FOR EMPLOYEES
----------------------------------------
THIS RESTRICTED STOCK AGREEMENT (the "Agreement"), effective as of
October 3, 1997, between Assisted Living Concepts, Inc., a Nevada corporation
(the "Company"), and Xxxxx Xxxxx Xxxxxx, xx employee of the Company (the
employee is hereinafter referred to as the "Employee"):
WHEREAS, the Company has established the Assisted Living Concepts,
Inc. Amended and Restated 1994 Stock Option Plan (the "Plan"); and
WHEREAS, the Company wishes to carry out the Plan (the terms of which
are hereby incorporated by reference and made a part of this Agreement); and
WHEREAS, the Plan provides for the issuance of shares of Common Stock,
par value $.01 per share, subject to certain restrictions thereon (hereinafter
referred to as "Restricted Stock"); and
WHEREAS, the Compensation Committee of the Company's Board of
Directors, appointed to administer the Plan, has determined that it would be to
the advantage and best interest of the Company and its stockholders to issue the
Restricted Stock provided for herein to the Employee in consideration of the
Employee's past and future services to the Company and other good and valuable
consideration provided for herein, and has advised the Company thereof and
instructed the undersigned officers to issue said Restricted Stock;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto do hereby agree as follows:
ARTICLE 1
DEFINITIONS
-----------
Whenever the following terms are used in this Agreement they shall
have the meaning specified below unless the context clearly indicates to the
contrary. The masculine pronoun shall include the feminine and neuter, and the
singular the plural, where the context so indicates. All capitalized terms used
herein without definition shall have the meaning ascribed to such terms in the
Plan.
Section 1.1 - Board
----------- -----
"Board" shall mean the Board of Directors of the Company.
Section 1.2 - Cause
----------- -----
"Cause" shall have the meaning ascribed to such term in the Employee's
employment agreement with the Company or a Subsidiary; provided, however, that
-------- -------
if "Cause" is not defined therein or if no such employment agreement is then in
effect, then "Cause" shall have such meaning, in conformance with applicable
law, as the Committee, in its sole and absolute discretion, shall determine is
appropriate.
Section 1.3 - Code
----------- ----
"Code" shall mean the Internal Revenue Code of 1986, as amended.
Section 1.4 - Committee
----------- ---------
"Committee" shall mean the Compensation Committee of the Board, appointed
as provided in the Plan.
Section 1.5 - Company
----------- -------
"Company" shall mean Assisted Living Concepts, Inc., a Nevada corporation.
Section 1.6 - Employment Agreement
----------- --------------------
"Employment Agreement" shall mean that certain employment agreement between
the parties which is being executed and delivered contemporaneously herewith, as
it may be amended from time to time by the parties.
Section 1.7 - Exchange Act
----------- ------------
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
Section 1.8 - Plan
----------- ----
"Plan" shall mean the Assisted Living Concepts, Inc. Amended and Restated
1994 Stock Option Plan, as amended from time to time.
Section 1.9 - Restricted Stock
----------- ----------------
"Restricted Stock" shall mean Common Stock of the Company issued under this
Agreement and subject to the Restrictions imposed hereunder.
Section 1.10 - Restrictions
------------ ------------
"Restrictions" shall mean the restrictions on sale or other transfer set
forth in Section 4.2 and the exposure to forfeiture set forth in Section 3.1.
2
Section 1.11 - Secretary
------------ ---------
"Secretary" shall mean the Secretary of the Company.
Section 1.12 - Subsidiary
------------ ----------
"Subsidiary" shall mean any corporation in which stock possessing fifty
percent or more of the total combined voting power, or fifty percent or more of
the value, of all classes of stock is owned directly or indirectly by the
Company.
ARTICLE 2
ISSUANCE OF RESTRICTED STOCK
----------------------------
In consideration of the execution by the Employee of the Employment
Agreement and for other good and valuable consideration, on the date hereof the
Company irrevocably issues to the Employee 50,000 shares of its $.01 par value
Common Stock upon the terms and conditions set forth in this Agreement.
ARTICLE 3
RESTRICTIONS
------------
Section 3.1 - Forfeiture of Restricted Stock
----------- ------------------------------
Immediately upon a termination of employment under the Employment Agreement
for Cause or by reason of voluntary resignation (not for "Good Reason" as
defined in the Employment Agreement), the Employee's rights in the Restricted
Stock then subject to Restrictions shall be forfeited.
Section 3.2 - Legend
----------- ------
Certificates representing shares of Restricted Stock issued pursuant to
this Agreement shall, until all Restrictions lapse or shall have been removed
and new certificates are issued pursuant to Section 3.3(b), bear the following
legend:
"The shares represented by this certificate are subject to reacquisition by
Assisted Living Concepts, Inc., and such shares may not be sold or
otherwise transferred except pursuant to the provisions of the Restricted
Stock Agreement by and between Assisted Living Concepts, Inc. and the
registered owner of such shares."
Section 3.3 - Lapse of Restrictions
----------- ---------------------
(a) Subject to Sections 3.1, 3.4, and 3.5, the Restrictions shall lapse in
four (4) cumulative installments commencing on the fourth anniversary of the
date of this Agreement
3
as follows: on the forth, fifth, sixth, and seventh anniversaries of the date of
this Agreement, twenty-five percent (25%) of the shares of Restricted Stock and
the Restrictions on such shares shall lapse.
(b) Upon the lapse of the Restrictions, the Company shall cause new
certificates to be issued with respect to such shares and delivered to the
Employee or his legal representative, free from the legend provided for in
Section 3.2 and any of the other Restrictions. Notwithstanding the foregoing,
no such new certificate shall be delivered to the Employee or his legal
representative unless and until the Employee or his legal representative shall
have paid to the Company in cash the full amount of all federal and state
withholding or other employment taxes applicable to the taxable income of the
Employee resulting from the grant of Restricted Stock or the lapse or removal of
the Restrictions.
Section 3.4 - Removal of Restrictions; Acceleration of Lapse of Restrictions,
----------- ---------------------------------------------------------------
Etc.
----
(a) By resolution, the Committee may, on such terms and conditions as it
deems appropriate, remove any or all of the Restrictions.
(b) Subject to Section 3.5, if the shares of the Company's Common Stock as
a whole are increased, decreased, changed into or exchanged for a different
number or kind of shares or securities of the Company, whether through merger,
consolidation, reorganization, recapitalization, reclassification, stock
dividend, stock split, combination of shares, exchange of shares, change in
corporate structure or the like, the Committee, in its sole and absolute
discretion, shall have the discretion and power to determine and to make
effective provision for acceleration of the time or times at which any
Restrictions shall lapse or be removed. In addition, in the case of the
occurrence of any event described in this subsection 3.4(b), the Committee,
subject to the provisions of the Plan and this Agreement, shall make an
appropriate and proportionate adjustment in the number and kind of shares of
Restricted Stock, to the end that after such event the Employee's proportionate
interest shall be maintained as before the occurrence of such event. Any such
adjustment made by the Committee shall be final and binding upon the Employee,
the Company and all other interested persons.
Section 3.5 - Lapse of Restrictions
----------- ---------------------
The Restrictions shall lapse, and the Restricted Stock shall cease to be
subject to forfeiture under Section 3.1, in the event that Employee shall be
entitled to the termination benefits payable under Section 6(a) or 6(b) of the
Employment Agreement.
Section 3.6 - Restrictions On New Shares
----------- --------------------------
In the event that the Employee receives any new or additional or different
shares or securities by reason of any transaction or event described in
subsection 3.4(b), such new or additional or different shares or securities
which are attributable to the Employee in his capacity as the owner of the
Restricted Stock then subject to Restrictions, shall be considered to be
Restricted Stock and shall be subject to all of the Restrictions, unless the
Committee provides, pursuant to Section 3.4, for the removal or lapse of the
Restrictions on the shares of
4
Restricted Stock underlying the distribution of the new or additional shares or
securities, or unless the Restrictions automatically lapse pursuant to Section
3.5.
ARTICLE 4
MISCELLANEOUS
-------------
Section 4.1 - Administration
----------- --------------
The Committee shall have the power to interpret the Plan and this Agreement
and to adopt such rules for the administration, interpretation and application
of the Plan as are consistent therewith and to interpret, amend or revoke any
such rules. All actions taken and all interpretations and determinations made
by the Committee in good faith shall be final and binding upon the Employee, the
Company and all other interested persons. No member of the Committee shall be
personally liable for any action, determination, or interpretation made in good
faith with respect to the Plan or the Restricted Stock.
Section 4.2 - Restricted Stock Not Transferable
----------- ---------------------------------
Restricted Stock (including any shares received by holders thereof with
respect to shares of Restricted Stock as a result of stock dividends, stock
splits or any other form of recapitalization) shall be subject to the following
Restrictions until such Restrictions lapse or shall be removed pursuant to this
Agreement: Neither the Restricted Stock nor any interest or right therein or
part thereof shall be liable for the debts, contracts, or engagements of the
Employee or his successors in interest or shall be subject to disposition by
transfer, alienation, anticipation, pledge, encumbrance, assignment or any other
means whether such disposition be voluntary or involuntary or by operation of
law by judgment, levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy) and any attempted disposition thereof shall
be null and void and of no effect; provided, however, that this Section 4.2
-------- -------
shall not prevent transfers by will or by the applicable laws of descent and
distribution or pursuant to a qualified domestic relations order as defined by
the Code or Title I of the Employee Retirement Income Security Act, as amended,
or the rules thereunder.
Section 4.3 - Conditions to Issuance of Stock Certificates
----------- --------------------------------------------
Shares of Restricted Stock may be either previously authorized but unissued
shares or issued shares which have then been reacquired by the Company. Such
shares shall be fully paid and nonassessable. The Company shall not be required
to issue or deliver any certificate or certificates for shares of stock pursuant
to this Agreement prior to fulfillment of all of the following conditions:
(a) The admission of such shares to listing on all stock exchanges on which
such class of stock is then listed; and
(b) The completion of any registration or other qualification of such
shares under any state or federal law or under rulings or regulations of the
Securities and Exchange
5
Commission or of any other governmental regulatory body, which the Committee
shall, in its absolute discretion, deem necessary or advisable; and
(c) The obtaining of any approval or other clearance from any state or
federal governmental agency which the Committee shall, in its absolute
discretion, determine to be necessary or advisable; and
(d) The lapse of such reasonable period of time as the Committee may from
time to time establish for reasons of administrative convenience; and
(e) The receipt by the Company of full payment for such shares, including
payment of any applicable withholding tax.
Section 4.4 - Escrow
----------- ------
The Secretary or such other escrow holder as the Committee may appoint
shall retain physical custody of the certificates representing the Restricted
Stock, including shares of Restricted Stock issued pursuant to Section 3.4(b),
until all of the Restrictions lapse or shall have been removed; provided,
--------
however, that in no event shall the Employee retain physical custody of any
-------
certificates representing Restricted Stock issued to him.
Section 4.5 - Notices
----------- -------
Any notice to be given by the Employee under the terms of this Agreement
shall be addressed to the Secretary of the Company or his office. Any notice to
be given to the Employee shall be addressed to him at the address given beneath
his signature hereto. By a notice given pursuant to this Section, either party
may hereafter designate a different address for notices to be given to him. Any
notice which is required to be given to the Employee shall, if the Employee is
then deceased, be given to the Employee's personal representative if such
representative has previously informed the Company of his status and address by
written notice under this Section. Any notice shall be deemed duly given when
enclosed in a properly sealed envelope or wrapper addressed as aforesaid,
deposited (with postage prepaid) in a post office or branch post office
regularly maintained by the United States Postal Service.
Section 4.6 - Rights as Stockholder
----------- ---------------------
Except as otherwise provided herein, upon the delivery of Restricted Stock
to the escrow holder pursuant to Section 4.4, the holder of the Restricted Stock
shall have all the rights of a stockholder with respect to the Restricted Stock
(excluding the right to vote the Restricted Stock), including the right to
receive all dividends or other distributions paid or made with respect to the
Restricted Stock; provided, however, that any and all shares of Common Stock
-------- -------
received by holders of Restricted Stock with respect to such Restricted Stock as
a result of stock dividends, stock splits or any other form of recapitalization
shall also be subject to the Restrictions until the Restrictions on the
underlying shares of Restricted Stock lapse or are removed pursuant to this
Agreement.
6
Section 4.7 - Titles
----------- ------
Titles are provided herein for convenience only and are not to serve as a
basis for interpretation or construction of this Agreement.
Section 4.8 - Construction
----------- ------------
This Agreement shall be administered, interpreted and enforced under the
internal laws of the state of incorporation of the Company without regard to the
principles of conflicts of laws thereof.
Section 4.9 - Conformity to Securities Laws
----------- -----------------------------
The Employee acknowledges that the Plan and this Agreement are intended to
conform to the extent necessary with all provisions of all applicable federal
and state laws, rules and regulations (including, but not limited to the
Securities Act of 1933, as amended, and the Exchange Act) and to such approvals
by any listing, regulatory or other governmental authority as may, in the
opinion of counsel for the Company, be necessary or advisable in connection
therewith. Notwithstanding anything herein to the contrary, the Plan shall be
administered, and the Restricted Stock is granted, only in such a manner as to
conform to such laws, rules and regulations. To the extent permitted by
applicable law, the Plan, this Agreement and the Restricted Stock shall be
deemed amended to the extent necessary to conform to such laws, rules and
regulations.
Section 4.10 - Amendments
------------ ----------
This Agreement and the Plan may be amended without the consent of the
Employee provided that such amendment would not impair any rights of the
Employee under this Agreement. No amendment of this Agreement shall, without the
consent of the Employee, impair any rights of the Employee under this Agreement.
7
IN WITNESS WHEREOF, this Agreement has been executed and delivered by
the parties hereto.
ASSISTED LIVING CONCEPTS, INC.,
a Nevada corporation.
By /s/ Xxxxxxx Xxxxxx
Name: Chief Financial Officer
Title: Xxxxxxx Xxxxxx
Employee
/s/ Xxxxx Xxxxx Xxxxxx
Xxxxx Xxxxx Xxxxxx
Address
Employee's Taxpayer Identification
Number:
------------------------------------------
8
