RESTRICTED STOCK AGREEMENT
THIS RESTRICTED STOCK AGREEMENT (this "Agreement") is made and entered into
as of the 26th day of August, 1996 (hereinafter referred to as the "Effective
Date"), by and between FAC REALTY, INC., a Delaware corporation (the
"Corporation"), and XXXXXXX X. XXXXXXXX (the "Participant").
WHEREAS, the Corporation's 1996 Restricted Stock Plan (the "Plan") has been
adopted by the Executive Compensation Committee (the "Committee") of the Board
of Directors of the Corporation (the "Board") and the Board; and
WHEREAS, the Committee has determined that it is desirable and in the best
interest of the Corporation to make an award (the "Award" ) of certain shares of
common stock, par value $.01 per share of the Corporation ("Common Stock"),
under the Plan, to the Participant, subject to certain restrictions as specified
below; and
WHEREAS, in order to enforce the aforesaid restrictions Participant is
required under the terms of the Award to immediately deposit the certificate(s)
for the shares of Common Stock subject to the Award, together with stock powers
appropriately endorsed in blank, with the Corporation in accordance with the
requirements of this Agreement.
NOW, THEREFORE, the Corporation and the Participant agree as follows:
1. Date of Award. The date of making the Award under this Agreement is the
26th day of August, 1996 (the "Effective Date") .
2. Receipt by Participant. The Participant acknowledges receipt from the
Corporation of 90,000 shares of Common Stock (the "Restricted Stock" ) and
agrees to the execution of stock powers or such other transfer authorizations as
the Corporation shall request, in blank, covering the Restricted Stock to be
held by the Corporation, prior to the distribution of certificates representing
the Restricted Stock to the Participant as hereinafter provided.
3. Investment Representation; Transfer Restrictions, and Registration
(a) Investment Representation. Participant represents to the Corporation
that the Participant is taking the Restricted Stock for investment and without
any present intention to sell, transfer or otherwise dispose of the Restricted
Stock.
(b) Securities Law Restrictions. The Participant agrees with the
Corporation that the Restricted Stock shall be subject to such stop transfer
orders and other restrictions as the Committee may deem advisable under the
rules, regulations, and other requirements of the Securities and Exchange
Commission, any stock exchange upon which Common Stock is then listed and any
other applicable federal or state securities laws, rules or regulations, and the
Committee may cause a legend or legends to be placed on any certificate
representing any of the shares of Restricted Stock to make appropriate
reference to such restrictions.
(c) Other Transfer Restrictions. The Participant agrees with the
Corporation that each certificate representing any of the shares of Restricted
Stock may bear a legend, substantially in the form attached as Exhibit A hereto,
to the effect that the shares of Restricted Stock represented thereby are
subject to potential forfeiture and may not be sold, exchanged, transferred,
pledged, hypothecated or otherwise disposed of except in accordance with the
terms of this Agreement, and shall be subject to such stop transfer orders and
other restrictions as the Committee shall deem advisable to ensure compliance
with the terms of this Agreement.
(d) Registration. Prior to vesting pursuant to Paragraph 5 below, the
Corporation shall cause the Restricted Stock to be registered under the
Securities Act of 1933 and to be listed on the New York Stock Exchange (the
"NYSE" ).
4. Receipt by the Corporation. The Corporation acknowledges receipt from
the Participant of certificates representing the Restricted Stock, registered in
the name of the Participant, and acknowledges receipt of stock powers executed
in blank by the Participant covering all of the Restricted Stock. Certificates
representing the Restricted Stock shall be held by the Corporation and
distributed or transferred as directed by the Committee in accordance with this
Agreement.
5. Vesting and Delivery of Restricted Stock by the Corporation
(a) Periodic Vesting. Subject to subparagraph 5(b) below, the Restricted
Stock shall vest and become nonforfeitable in accordance with the following
schedule:
On the third anniversary of the Effective Date: 30% Vested
On the fourth anniversary of the Effective Date an additional: 10% Vested
On the fifth anniversary of the Effective Date an additional: 10% Vested
On the sixth anniversary of the Effective Date an additional: 10% Vested
On the seventh anniversary of the Effective Date an additional: 10% Vested
On the eighth anniversary of the Effective Date an additional: 10% Vested
On the ninth anniversary of the Effective Date an additional: 10% Vested
On the tenth anniversary of the Effective Date an additional: 10% Vested
(b) Accelerated Vesting
(i) Notwithstanding the requirement of continued employment in
subparagraph 5 (a) above, all Restricted Stock not previously vested and
subject to forfeiture shall vest and the right of the Participant to such
shares of Restricted Stock shall become nonforfeitable upon the occurrence
of any of the following:
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(i) the Participant's death during his employment by the Corporation;
or
(ii) the Participant's disability (as defined in the Plan) during his
employment by the Corporation; or
(iii) termination of the Participant's employment by the Corporation
due to the Corporation's election not to extend the Participant's
employment agreement (with the Corporation with an Effective Date of August
26, 1996, as the same may be amended "the Employment Agreement") as
permitted in Paragraph 2(a) thereof; or
(iv) the termination of Participant's employment by the Corporation
"without cause" pursuant to 5(a)(iii) of the Employment Agreement if such
termination occurs within three (3) months prior to, at the time of, or
within one (1) year following a "change of control" as defined in Section
2(e) of the Employment Agreement or, provided that such change is effected,
the execution of a definitive agreement therefor.
(c) Delivery of Restricted Stock Certificates to the Participant. Within
thirty (30) days after a date on which shares of Restricted Stock have become
vested as provided in subparagraphs 5 (a) or 5 (b) above, the Committee shall
instruct the appropriate officer of the Corporation to deliver to the
Participant, the Participant's designee, or such other person as shall have been
designated as Participant's beneficiary in accordance with this Agreement, as
applicable, certificates representing the shares of Restricted Stock which have
become vested and nonforfeitable, free from any restrictions imposed by this
Agreement other than such restrictions and conditions as may be deemed necessary
by the Committee to assure compliance with all applicable securities laws rules
regulations and listing requirements as set forth in subparagraph 3 (b) above.
(d) Delivery of Forfeited Restricted Stock. If the Participant's employment
with the Corporation terminates for any reason other than one of those provided
in subparagraph 5 (b) above, before all of the shares of Restricted Stock are
vested in accordance with subparagraphs 5 (a) and 5 (b) above, all such shares
then subject to forfeiture shall be deemed forfeited by the Participant and the
Committee shall instruct the appropriate officer of the Corporation concerning
the disposition of such forfeited shares. Thereafter such forfeited shares shall
cease to be subject to this Agreement.
(e) Limitation on Shares of Restricted Stock. Except as otherwise provided
in Paragraph 6 (a) or 9 of this Agreement, the aggregate number of shares of
Restricted Stock which the Participant may be entitled to receive under this
Agreement shall not exceed 90,000.
6. Voting Rights; Dividends; Other Distributions
(a) The Participant shall have the full power to vote all of the Restricted
Stock
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held by the Corporation in his name from time to time and shall be entitled to
receive all cash dividends declared upon any of the Restricted Stock held by the
Corporation in his name from time to time. All shares of Common Stock or other
securities, including but not limited to stock dividends, issued in respect of
the Restricted Stock or in substitution thereof, whether by the Corporation or
by another issuer, shall be held by the Corporation and shall be subject to all
terms and conditions of this Agreement and shall be redelivered to the
Participant or delivered as instructed by the Committee under the same
circumstances as the Restricted Stock with respect to, or in substitution for
which they were issued; provided, however, that if the Participant should
receive rights, warrants or fractional interests in respect of any of the
Restricted Stock held by the Corporation in his name, such rights or warrants
may be held, exercised, sold or otherwise disposed of, and such fractional
interests may be settled, by the Participant free and clear of the restrictions
herein set forth.
(b) The Participant shall use the cash dividends paid on any unvested
shares of Restricted Stock, less an amount necessary to pay all applicable taxes
associated with the vesting of the Restricted Stock and such dividends, to
purchase additional shares of Common Stock within thirty (30) days of payment or
as soon thereafter as the Participant may purchase shares of Common Stock
without penalty under the Federal securities laws.
7. Designation of Beneficiary. The Participant may file with the Committee
a written designation of one or more persons as the beneficiary who shall be
entitled to receive the Restricted Stock, if any, distributable to the
Participant upon his death.
The Participant may, from time to time, revoke or change his beneficiary
designation without the consent of any prior beneficiary, if any, by filing a
new designation with the Committee. The last such designation received by the
Committee shall be controlling; provided, however, that no designation, or
change or revocation thereof, shall be effective unless received by the
Committee prior to the Participant's death, and in no event shall it be
effective as of a date prior to such receipt.
If no such beneficiary designation is in effect at the time of the
Participant's death, or if no designated beneficiary survives the Participant,
or if such designation conflicts with law, the Participant's estate shall be
deemed to have been designated his beneficiary and shall receive the Restricted
Stock, if any, distributable to the Participant upon the Participant's death. If
the Committee is in doubt as to the right of any person to receive such
distribution, the Committee may direct an appropriate officer of the Corporation
to retain the Restricted Stock, without liability for any interest in respect
thereof, until the rights thereto are determined, or the Committee may direct
the transfer of such Restricted Stock into any court of appropriate jurisdiction
and such transfer shall be deemed a complete discharge of the obligations of the
Corporation hereunder.
8. Effect of Award on Status of Participant. The fact that an Award has
been made to the Participant under this Plan shall not confer on the Participant
any right to continued employment with the Corporation; nor shall it limit the
right of the Corporation to terminate the Participant's employment at any time.
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9. Adjustment Upon Chances in Capitalization: Dissolution or Liquidation
(a) In the event of a change in the number or type of shares of Common
Stock outstanding (or in the event of an exchange of such shares) by reason of a
reclassification recapitalization, reorganization, merger, or consolidation, or
other similar capital adjustment, merger or consolidation of the Corporation, or
the sale by the Corporation of all or a substantial portion of its assets, or
the occurrence of any other event which could affect the implementation of the
Plan and the realization of its objectives, the Committee shall make such
adjustments in the terms, conditions, or restrictions of this Agreement as are
equitable and just.
(b) The making of the Award under this Agreement does not affect in any way
the right or power of the Corporation or its stockholders to make or authorize
any adjustment, recapitalization, reorganization, or other change in the
Corporation's capital structure or its business, or any merger or consolidation
of the Corporation, or to issue bonds, debentures, preferred or other preference
stock ahead of or affecting Common Stock or the rights thereof or the
dissolution or liquidation of the Corporation, or any sale or transfer of all or
any part of the Corporation's assets or business.
10. Nontransferability. The Restricted Stock may not be sold, exchanged,
transferred, pledged, hypothecated, or otherwise disposed of by the Participant
until transferred to the Participant by the Corporation in accordance with the
terms of this Agreement. Nothing herein shall preclude the Participant from
making a gift of any Restricted Stock to a spouse, child, stepchild, grandchild,
parent, sibling, or legal dependent of the Participant or to a trust of which
the beneficiary or beneficiaries of the trust shall be either a person
designated herein or the Participant, provided, however, that any Restricted
Stock so given shall remain subject to the restrictions, obligations and
conditions set forth in this Agreement. In addition, the Restricted Stock may be
tendered in response to a tender offer for or a request or invitation to tender
of greater than fifty percent (50%) of the common stock of the Corporation and
may be surrendered in a merger, consolidation or share exchange involving the
Corporation; provided, however, in each case, that except as otherwise provided
in Paragraph 6 above, the security or other consideration received in exchange
therefor shall thereafter be subject to the restrictions and conditions set
forth in this Agreement.
11. Taxes. All Restricted Stock distributed pursuant to this Agreement, and
any amounts distributed with respect thereto prior to distribution of such
Restricted Stock by the Corporation, shall be subject to applicable federal,
state and local withholding for taxes. The Participant expressly acknowledges
and agrees to such withholding without regard to whether the Restricted Stock
may then be sold or otherwise transferred by the Participant.
12. Notices. Any notices or other communications required or permitted
to be given under this Agreement shall be in writing and shall be deemed to have
been sufficiently given if delivered personally or when delivered to a
nationally recognized overnight courier service or deposited in the United
States mail as Certified Mail, return receipt requested, properly addressed and
postage prepaid, if to the Corporation at its principal office prior to December
1, 1996 at 000 Xxxxx Xxxxxx Xxxxx, Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000 (from and
after December 1, 1996 at 00000 Xxxxxxx Xxxxxxx, Xxxxx Xxxxx Xxxx Xxxxx, Xxxx,
Xxxxx Xxxxxxxx 00000; and, if to the Participant,
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at his last address appearing on the books of the Corporation. The Corporation
and the Participant may change their address or addresses by giving written
notice of such change as provided herein. Any notice or other communication
hereunder shall be deemed to have been given on the date actually delivered, as
of the first (1st) business day following delivery to a nationally recognized
overnight courier service or as of the third (3rd) business day following the
date mailed, as the case may be.
13. Construction Controlled by Plan. This Agreement shall be construed so
as to be consistent with the Plan; and except as specifically provided herein
the provisions of the Plan shall be deemed to be controlling in the event that
any provision hereof should appear to be inconsistent therewith. The Participant
hereby acknowledges receipt of a copy of the Plan from the Corporation.
14. Severability. Whenever possible, each provision of this Agreement shall
be interpreted in such a manner as to be valid and enforceable under applicable
law, but if any provision of this Agreement is determined to be unenforceable,
invalid or illegal, the validity of any other provision or part thereof, shall
not be affected thereby and this Agreement shall continue to be binding on the
parties hereto as if such unenforceable, invalid or illegal provision or part
thereof had not been included herein.
15. Modification of Agreement; Waiver. This Agreement may be modified,
amended, suspended or terminated, and any terms, representations or conditions
may be waived, but only by a written instrument signed by each of the parties
hereto. No waiver hereunder shall constitute a waiver with respect to any
subsequent occurrence or other transaction hereunder or of any other provision
hereof .
16. Cautions and Headings; Gender and Number. Captions and paragraph
headings used herein are for convenience only, do not modify or affect the
meaning of any provision herein are not a part hereof, and shall not serve as a
basis for interpretation or in construction of this Agreement. As used herein,
the masculine gender shall include the feminine and neuter, the singular number
the plural, and vice versa, whenever such meanings are appropriate.
17. Governing Law: Venue and Jurisdiction. Without regard to the principles
of conflicts of laws, the laws of the state of North Carolina shall govern and
control the validity interpretation, performance, and enforcement of this
Agreement. The parties hereto agree that any suit or action relating to this
Agreement shall be Instituted and prosecuted in the courts of the County of
Xxxxxxxx, State of North Carolina, and each party hereby does waive any right or
defense relating to such jurisdiction and venue.
18. Binding Effect. This Agreement shall be binding upon and shall inure to
the benefit of the Corporation, and its successors and assigns, and shall be
binding upon and inure to the benefit of the Participant, and his heirs,
legatees, personal representatives, executors and administrators.
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19. Entire Agreement. This Agreement constitutes and embodies the entire
understanding and agreement of the parties hereto and, except as otherwise
provided hereunder, there are no other agreements or understandings, written or
oral in effect between the parties hereto relating to the matters addressed
herein.
20. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when executed and delivered shall be deemed an
original, but all of which taken together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the Corporation has caused this instrument to be
executed in its corporate name by a duly authorized officer, and attested by its
Secretary or any of its Assistant Secretaries, and its corporate seal to be
hereto affixed, all by authority of its Board of Directors first duly given; and
the individual parties hereto have hereunto set his hand and adopted as his seal
the typewritten word "SEAL" appearing beside his name, all done this the day and
year first above written.
FAC REALTY, INC.
By: ____________________________(SEAL)
X. Xxxxxxx Xxxxxx
President and COO
ATTEST:
___________________
___________________ Secretary
[Corporate Seal]
____________________________(SEAL)
Xxxxxxx X. Xxxxxxxx
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EXHIBIT A
Form of Legend
The shares represented by this certificate are subject to restrictions on
transfer and potential forfeiture under the terms of a Restricted Stock
Agreement dated April 4, 1996, a copy of which agreement may be obtained from
the issuer by writing to:
prior to December 1, 1996
FAC Realty, Inc.
000 Xxxxx Xxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Corporate Secretary
from and after December 1, 1996
FAC Realty, Inc.
00000 Xxxxxxx Xxxxxxx
Xxxxx Xxxxx Xxxx Xxxxx
Xxxx, Xxxxx Xxxxxxxx 00000
Attention: Corporate Secretary
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ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, Xxxxxxx X. Xxxxxxxx hereby sells, assigns and transfers
in accordance with the terms of that Restricted Stock Agreement dated August 26,
1996 between himself and the Company (hereinafter defined)
unto___________________ (_____________) unvested Shares of the Common Stock of
FAC REALTY, INC. (the "Company") standing in his name on the books of the
Company represented by Certificate(s) No.____________ herewith, and does hereby
irrevocably constitute and appoint the Company as his attorney-in-fact to
transfer the said stock on the books of the Company with full power of
substitution in the same.
Dated ___________________________
IN THE PRESENCE OF:
____________________________________________
____________________________________________ (SEAL)
Xxxxxxx X. Xxxxxxxx
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