EXHIBIT 10.2
NORTH ATLANTIC HOLDING COMPANY, INC.
2006 EQUITY INCENTIVE PLAN
RESTRICTED STOCK AWARD AGREEMENT
THIS RESTRICTED STOCK AWARD AGREEMENT is made and entered into as of
_________, 2006 by and between North Atlantic Holding Company, Inc. a Delaware
corporation ("Company"), and _________ ("Grantee") pursuant to the terms and
conditions of the North Atlantic Holding Company, Inc. 2006 Equity Incentive
Plan ("Plan").
SECTION 1. GRANT OF RESTRICTED STOCK AWARD.
(a) RESTRICTED STOCK AWARD. On the terms and conditions set forth in this
Agreement, the Company hereby grants the Grantee 2,500 Shares ("Granted
Shares"). The date of grant of the Granted Shares shall be as of __________.
(b) NO PURCHASE PRICE. In lieu of a purchase price, this award is made in
consideration of Service previously rendered by the Grantee to the Company or
its Subsidiaries.
(c) PLAN AND DEFINED TERMS. This award is granted under and subject to the terms
of the Plan, which is incorporated herein by reference. If there is any
inconsistency between the terms of the Plan and the terms of this Agreement, the
Plan's terms shall supersede and replace the conflicting terms of this
Agreement. Capitalized terms are defined in Section 10 of this Agreement.
SECTION 2. ISSUANCE OF GRANTED 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 (or in the names of such person and his or her spouse as
community property or as joint tenants with right of survivorship).
(b) STOCKHOLDER RIGHTS. Until such time as the Company reacquires the Granted
Shares or the Granted Shares are forfeited, 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 and the
Stockholders' Agreement.
(c) ESCROW. For so long as Granted Shares are not vested, 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
held in escrow shall be paid directly to the Grantee and shall not be held in
escrow. Granted Shares together with any other assets or securities held in
escrow hereunder, shall be (i) surrendered to the Company for reacquisition
under the forfeiture provision set forth in Section 6 of this Agreement or (ii)
released to the Grantee upon the Grantee's request to the extent the Granted
Shares are not Restricted Shares (but not more frequently than once every six
(6) months). In any event, all Granted Shares which have vested (and any other
vested assets and securities attributable thereto) shall be released within
sixty (60) days upon the date the Grantee's Service terminates.
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(d) SECTION 83(B) ELECTION. Section 83 of the Code provides that the Grantee is
not subject to federal income tax until the Granted Shares are vested. 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
excess (if any) of the Fair Market Value of the award (determined as of the date
of the award) over the Purchase Price (if any). A Section 83(b) election must be
filed with the Internal Revenue Service within thirty (30) days after the date
of this award - even if no tax is due because the Fair Market Value of the
Restricted Shares on the date of the award equals the Purchase Price paid or
equals $0. 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 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 SHARES ARE VESTED.
(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.
(f) STOCKHOLDERS' AGREEMENT. The Grantee agrees to be bound by all of the
provisions, terms and conditions of the Stockholders' Agreement. The Grantee
further agrees to execute and deliver an amendment to the Stockholders'
Agreement or such other instruments as the Company may reasonably request to
evidence the Grantee becoming a party to the Stockholders' Agreement.
SECTION 3. VESTING
Provided that the Grantee remains in continuous Service through each vesting
date, Granted Shares shall vest in twenty percent (20%) increments as follows:
(a) on the date of grant; and
(b) on each of the first, second, third and fourth anniversaries of the date of
grant.
SECTION 4. TERMINATION OF SERVICE
In the event that the Grantee's Service is terminated for any reason (i) all
Vested Shares held by the Grantee as of the date of such termination shall
remain outstanding and (ii) all Restricted Shares held by the Grantee as of the
date of such termination shall be immediately forfeited and cancelled in
accordance with Section 6 of this Agreement.
SECTION 5. CHANGE OF CONTROL
Notwithstanding anything herein to the contrary, upon the occurrence of a Change
of Control, all Restricted Shares held by the Grantee shall immediately vest and
become nonforfeitable upon such Change of Control.
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SECTION 6. FORFEITURE PROVISION.
The Company shall have the right to reacquire the Granted Shares and the Grantee
will be deemed to have transferred the Granted Shares to the Company in the
event the Grantee holds any Restricted Shares when his or her Service is
terminated (subject to the provisions of Section 5 of this Agreement). From and
after such time, the person from whom the Granted Shares are to be acquired
shall no longer have any rights as a holder of the Granted Shares and such
Granted Shares shall be deemed to have been reacquired by and transferred to the
Company. Once a forfeiture is effected, this award shall be cancelled with
respect to the forfeited Shares and the Company shall have no further obligation
with respect thereto.
SECTION 7. 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 either
(i) the exemption from such registration provided by Rule 701 promulgated under
either the Securities Act for stock issuances under compensatory benefit plans
such as the Plan or (ii) the exemption for grants made to executive officers of
the Company (or of its Parent or Subsidiary) under Section 4(2) of the
Securities Act and Regulation D of the Securities and Exchange Commission
("Regulation D").
(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 for investment, and not
with a view to sale or distribution thereof.
(ii) The Grantee is prepared to hold the Granted Shares for an
indefinite period and the Grantee is aware that Rule 144 promulgated under the
1933 Act, which exempts certain resales of securities, is not presently
available to exempt the resale of the Granted Shares from the registration
requirements of the Securities Act.
(iii) The Grantee is a director of the Company (or of a Parent or
Subsidiary) and further acknowledges that he or she is an "accredited investor"
within the meaning of Rule 501(a)(4) of Regulation D by virtue of the Grantee's
directorship.
(c) NO REGISTRATION RIGHTS. The Company may, but shall not be obligated to
register or qualify the award of the Granted Shares to the Grantee under the
Securities Act or any other applicable law. The Company shall not be obligated
to take affirmative action to cause the award of the Granted Shares to the
Grantee to comply with any law.
(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 (i) the forfeiture provision
in Section 6 of this Agreement, (ii) the Stockholders' Agreement, (iii) the
Indenture, (iv) applicable credit agreements and (v) applicable law, in each
case to the same extent such Granted Shares would be so subject if retained by
the Grantee.
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(e) PERMITTED TRANSFERS. A "Permitted Transfer" shall mean: (i) a transfer by
beneficiary designation, will or intestate succession or (ii) a transfer to the
Grantee's spouse, 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, 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 HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR
OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER
SUCH ACT OR AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY AND ITS
COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED."
(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.
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(j) ADMINISTRATION. Any determination by the Company in connection with any of
the matters set forth in this Section 7 shall be conclusive and binding on the
Grantee and all other persons.
SECTION 8. ADJUSTMENT OF SHARES.
In the event of a subdivision of the outstanding Shares, a
declaration of a dividend payable in Shares, a declaration of an extraordinary
dividend payable in a form other than Shares in an amount that has a material
effect on the Fair Market Value of the Shares, a combination or consolidation of
the outstanding Shares into a lesser number of Shares, a recapitalization, a
spin-off, a reclassification or a similar occurrence, the terms of this award
(including, without limitation, the number and kind of Shares subject to this
award and the Purchase Price) may be adjusted as set forth in Section 10 of the
Plan. In the event that the Company is a party to a merger or consolidation,
this award shall be subject to the agreement of merger or consolidation, as
provided in Section 10 of the Plan.
SECTION 9. MISCELLANEOUS PROVISIONS.
(a) NO RETENTION RIGHTS. Nothing in this award or in the Plan 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
any Parent or Subsidiary) 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.
(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, together with the Plan and the
Stockholders' Agreement, constitute the entire contract between the parties
hereto with regard to the subject matter hereof. They supersede any other
agreements, representations or understandings (whether oral or written and
whether express or implied) which relate to the subject matter hereof.
(d) WAIVER. 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 its rights under this Agreement 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 joined herein
and be bound by the terms hereof.
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(g) CHOICE OF LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware, as such laws are applied to
contracts entered into and performed in such State.
SECTION 10. DEFINITIONS.
(a) "AGREEMENT" shall mean this Restricted Stock Award Agreement.
(b) "BOARD OF DIRECTORS" shall mean the Board of Directors of the Company, as
constituted from time to time.
(c) "CHANGE OF CONTROL" shall mean the first to occur of any of the following
events:
(i) Any person or group of related persons (other than the Management
Group) for purposes of Section 13(d) of the Exchange Act, becomes the
beneficial owner of the power, directly or indirectly, to vote or
direct the voting of securities having more than 50% of the ordinary
voting power for the election of directors of the Company. "Management
Group" shall mean Xxxxxx X. Xxxxx, Xx., Xxxxx X. Xxxxxxx and other
members of senior management of the Company on the date of the
Indenture.
(ii) A majority of the Board of Directors of the Company shall consist of
Persons who are not Continuing Directors of the Company, as the case
may be. "Continuing Director" shall mean, as of the date of
determination, any person who (1) was a member of the Board of
Directors on the date of the Indenture or (2) was nominated for
election or elected to the Board of Directors with the affirmative
vote of a majority of the Continuing Directors who were members of
such Board of Directors at the time of such nomination or election.
(iii) The consummation of any sale, lease, exchange or other disposition
(in one transaction or a series of related transactions) of all or
substantially all of the assets of the Company and its Subsidiaries.
A transaction shall not constitute a Change of Control if its sole purpose is to
change the state of the Company's incorporation or to create a holding company
that will be owned in substantially the same proportions by the persons who held
the Company's securities immediately before such transaction.
(d) "CODE" shall mean the Internal Revenue Code of 1986, as amended from time to
time, and the regulations promulgated thereunder.
(e) "COMPANY" shall mean North Atlantic Holding Company, Inc., a Delaware
corporation, and its successors and assigns.
(f) "CONSULTANT" shall mean a person who performs bona fide services for the
Company or a Subsidiary as a consultant or advisor, excluding Employees and
Directors.
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(g) "DIRECTOR" shall mean a member of the Board of Directors or the board of
directors of a Subsidiary who is not an Employee.
(h) "EMPLOYEE" shall mean any individual who is a common-law employee of the
Company or a Subsidiary.
(i) "FAIR MARKET VALUE" of a Share as of a given date shall be:
(i) If the Shares are listed on any established stock exchange or a
national market system, including, without limitation, The Nasdaq National
Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair Market
Value shall be the closing sales price for a share of such stock (or the closing
bid, if no sales were reported) as quoted on such exchange or system for the
last market trading day prior to the time of determination, as reported in The
Wall Street Journal or such other source as the Board of Directors deems
reliable;
(ii) If the Shares are regularly quoted by a recognized securities
dealer but selling prices are not reported, its Fair Market Value shall be the
mean between the high bid and low asked prices for a Share on the last market
trading day prior to the day of determination; or
(iii) In the absence of an established market for the Shares, the
Fair Market Value thereof shall be determined in good faith by the Board of
Directors, in accordance with the principles set forth in Section 409A of the
Code. Such determination shall be conclusive and binding on all persons.
(j) "GRANTED SHARES" shall have the meaning ascribed to such term in Section
1(a) of this Agreement.
(k) "GRANTEE" shall mean the person named herein.
(l) "INDENTURE" shall mean that certain Indenture, dated as of February 17,
2004, between the Company and Xxxxx Fargo Bank Minnesota, National Association,
as may be amended from time to time.
(m) "PERMITTED TRANSFER" shall have the meaning ascribed to such term in Section
7(e) of this Agreement.
(n) "PLAN" shall mean the North Atlantic Holding Company, Inc. 2006 Equity
Incentive Plan, as may be amended from time to time.
(o) "PURCHASE PRICE" shall mean the price, if any, paid by the Grantee for the
Granted Shares.
(p) "REGULATION D" shall have the meaning ascribed to such term in Section 7(a)
of this Agreement.
(q) "RESTRICTED SHARE" shall mean a Granted Share that is not vested.
(r) "SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
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(s) "SERVICE" shall mean service as an Employee, Director or Consultant. 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).
(t) "SHARE" shall mean one share of common stock of the Company, with a par
value of $0.01 per share, as adjusted in accordance with Section 10 of the Plan.
(u) "STOCKHOLDERS' AGREEMENT" shall mean that certain Amended and Restated
Exchange and Stockholders' Agreement, dated as of February 9, 2004, by and among
the Company, North Atlantic Trading Company, Inc. and the stockholders named
therein, as may be amended from time to time.
(v) "SUBSIDIARY" shall have the meaning ascribed to such term in the Indenture.
(w) "VESTED SHARE" shall mean a Granted Share that is vested.
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By signing below, the Grantee accepts this award, and acknowledges and agrees
that this award is granted under and governed by the terms and conditions of the
North Atlantic Holding Company, Inc. 2006 Equity Incentive Plan and the
Restricted Stock Award Agreement.
GRANTEE: NORTH ATLANTIC HOLDING COMPANY, INC.
------------------------ By:
-------------------------------------
Title:
----------------------------------
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EXHIBIT A
STOCK POWER
FOR VALUE RECEIVED the undersigned hereby sell(s), assign(s) and transfer(s)
unto North Atlantic Holding Company, Inc. (the "Company"), _________________
(_____) shares of the common stock, par value $0.01 per share, of the Company
standing in his/her/their/its name on the books of the Company represented by
Certificate No. ________________ herewith and do(es) hereby irrevocably
constitute and appoint ________________________ his/her/their/its
attorney-in-fact, with full power of substitution, to transfer such shares on
the books of the Company.
Dated: __________________ Signature: _________________________________
Print Name and Mailing Address
____________________________________________
____________________________________________
____________________________________________
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 its right to forfeit the Shares 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: _____________________________
Address: _____________________________
_____________________________
Social Security Number: _____________________________
(2) The property with respect to which the election is being made is _________
shares of the common stock, par value $0.01 per share, of North Atlantic
Holding Company, Inc.
(3) The property was issued on _________________.
(4) The taxable year in which the election is being made is the calendar year
___________.
(5) The property is subject to a substantial risk of forfeiture to which the
issuer has the right to acquire the property at the lower of fair market
value or the original purchase price, at any time prior to the vesting
date. The issuer's right to reacquire the property lapses in a series of
installments over a _____________-year period ending on
____________________, 200__.
(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) The amount paid for such property is $__________ per share.
(8) A copy of this statement was furnished to North Atlantic Holding Company,
Inc. for whom taxpayer rendered the services underlying the transfer of
property.
(9) This statement is executed on __________________________________.
_______________________________ ________________________________________
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 Restricted Stock Agreement.
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.
