1
RESTRICTED STOCK AGREEMENT
This Restricted Stock Agreement (the "Agreement") is entered into as of
the 22nd day of May, 1996, by and between SUN TELEVISION AND APPLIANCES, INC.,
an Ohio corporation (the "Company") and Xxxxxx X. Xxxxxx (the "Executive").
RECITAL
The Company has agreed to employ the Executive as its Executive Vice
President and Chief Financial Officer and Treasurer and the Executive has
accepted such employment pursuant to an Employment Agreement dated as of May
22, 1996. Pursuant to that agreement, the Company has agreed to issue shares of
its common stock to the Executive, as provided in this Agreement.
AGREEMENT
1. GRANT OF RESTRICTED STOCK. The Company hereby agrees to issue to the
Executive sixteen thousand six hundred and sixty-seven (16,667) shares
of the Company's common stock, $.01 par value (the "Restricted Shares"),
subject to the terms and conditions set forth in this Agreement. The
Company shall cause certificates for the Restricted Shares to be issued
in the Executive's name as provided in Section 2 of this Agreement, and
the Executive shall thereupon be a shareholder of the Company with
respect to all of the Restricted Shares represented by each such
certificate and shall have all of the rights of a shareholder with
respect to the Restricted Shares, including the right to vote the
Restricted Shares and to receive all dividends and other distributions
paid with respect to the Restricted Shares; provided, however, that the
Restricted Shares shall be subject to the restrictions hereinafter
described. Certificates representing Restricted Shares shall be
imprinted, in conspicuous type, with the following legend:
THE SALE, EXCHANGE, TRANSFER, PLEDGE, HYPOTHECATION OR OTHER
DISPOSITION OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE AND
ANY INTEREST THEREIN IS RESTRICTED BY AN AGREEMENT DATED AS OF
MAY 22, 1996 BETWEEN THE CORPORATION AND THE HOLDER, A COPY OF
WHICH IS LOCATED AT THE OFFICE OF THE SECRETARY OF THE
CORPORATION. THE SECRETARY OF THE CORPORATION WILL MAIL WITHOUT
CHARGE TO A SHAREHOLDER, WITHIN FIVE DAYS AFTER WRITTEN REQUEST
THEREFOR FROM SUCH SHAREHOLDER, A COPY OF SUCH AGREEMENT.
Delivery of the certificates for Restricted Shares shall occur as soon
as practicable.
2. RESTRICTIONS. The Executive shall not sell, exchange, transfer, pledge,
hypothecate or otherwise dispose of any legal or beneficial ownership
interest in the Restricted Shares
2
otherwise than in the amounts and after the dates (each a
"Vesting Date") determined as follows: The Restricted Shares
shall become vested at the rate of 1/48 of such shares at the end
of each month following the effective date.
If the Executive is continuously employed by the Company on a full-time
basis from the date of this Agreement through and including the last
Vesting Date, or if the Executive's employment is terminated at any time
prior to the last Vesting Date, unless such termination is either by the
Company for cause or voluntarily by Executive, then all of the
Restricted Shares shall vest and Executive, Executive's personal
representative or the person or persons to whom his rights pass by will
or the laws of descent and distribution may sell, exchange, transfer,
pledge, hypothecate or otherwise dispose of the Restricted Shares
without reference to the restrictions set forth in this Section (but
subject, to the extent then applicable, to the restrictions set forth in
Section 4) and shall be entitled to the reissuance of a stock
certificate without the legend referred to in Section 1. If the
Company's full-time employment of Executive should be terminated at any
time prior to any Vesting Date either by the Company for Cause or
voluntarily by Executive, then all of the Restricted Shares not vested
prior to that Vesting Date shall be forfeited by the Executive and the
certificate or certificates for such unvested Restricted Shares shall be
delivered to the Company by the Executive for cancellation. As used
herein, "cause" shall have the meaning ascribed to that term in Section
7 of the Employment Agreement.
3. REORGANIZATION OR CHANGE IN CONTROL.
(a) If shares of common stock of the Company should, as a result of a stock
split, stock dividend, combination of shares or any other change, or
exchange for other securities, by reclassification, reorganization,
merger, consolidation, recapitalization or otherwise, be increased or
decreased or changed into or exchanged for a different number or kind of
shares of stock or other securities of the Company or of another
corporation, the number of Restricted Shares shall be adjusted to
reflect such action on the same basis as other shares of common stock of
the Company then outstanding.
(b) If, as a result of one of the events set forth in paragraph (a) of this
Section 3, the Executive shall, as owner of the Restricted Shares, be
entitled to new or additional or different shares of stock or
securities, the certificate or certificates therefor, or other evidences
of such new or additional or different shares or securities, shall be
imprinted with the legends set forth in Sections 1 and 4, and all the
provisions of this Agreement shall be applicable to such new or
additional or different shares or securities to the extent applicable to
the Restricted Shares.
(c) In the event of a "Change in Control" (as defined in Section 8 of the
Employment Agreement), the restrictions described in Section 2 shall
terminate and the Restricted Shares shall be freely transferrable by the
Executive upon such Change in Control (but subject, to the extent then
applicable, to the restrictions set forth in Section 4).
- 2 -
3
4. SECURITIES LAW COMPLIANCE. The Executive understands that the
Restricted Shares have not been registered under the Securities Act of
1933, as amended (the "Act") and are, therefore, "restricted
securities" as that term is defined in Rule 144 of the Securities and
Exchange Commission ("SEC"). The Executive further understands that,
regardless of the termination of the Restricted Period and the vesting
provisions set forth in Section 2, he may not sell or otherwise dispose
of the Restricted Shares unless they are registered under the Act and
any applicable state securities law or an exemption from such
registration is available. The Executive therefore agrees that the
certificate or certificates for the Restricted Shares delivered to him
pursuant to this Agreement shall bear the following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY
STATE SECURITIES LAW AND MAY NOT BE SOLD OR OTHERWISE DISPOSED OF
UNLESS THEY ARE SO REGISTERED OR UNLESS, IN THE OPINION OF COUNSEL
ACCEPTABLE TO THE CORPORATION, AN EXEMPTION FROM THE REQUIREMENT FOR
SUCH REGISTRATION IS AVAILABLE.
The Executive further understands that, regardless of the status of the
Shares as "Restricted Securities," restrictions on resale of the Shares
may be applicable if he is an "affiliate" of the Company, as that term
is used in Rule 144. The Executive agrees that he will advise the
Secretary of the Company prior to any sale or other transfer of the
Restricted Shares.
5. WITHHOLDING TAXES. The Company shall have the right to require the
Executive to remit to the Company, or to withhold from other amounts
payable to the Executive, as compensation or otherwise, an amount
sufficient to satisfy all federal, state and local withholding tax
requirements.
6. NO CONTRACT OF EMPLOYMENT. Nothing in this Agreement shall confer on the
Executive any right to continue in the service of the Company or reduce,
enlarge or modify the employment relationship between the Company and
the Executive. The Restricted Shares and the Vesting Schedule shall not
be affected by any change of duties or position as long as the Executive
continues to be employed on a full-time basis by the Company.
7. NOTICES. All notices required pursuant to this Agreement shall be in
writing and shall be personally delivered or sent by registered or
certified mail, postage prepaid, (a) if to the Company, at its principal
office, Attn: Chairman of the Board; or (b) if to the Executive, to the
Executive's last address on the personnel records of the Company.
8. GENERAL. This Agreement shall be construed as a contract under the laws
of the State of Ohio, without reference to its choice of law rules. It
may be executed in several counterparts, all of which shall constitute
one agreement. It shall bind and benefit the parties and their
- 3 -
4
respective successors, assigns, heirs and legal representatives. No
assignment of this Agreement, in whole or in part, may be made by any
party hereto without the prior written consent of all of the other
parties.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
SUN TELEVISION AND APPLIANCES, INC.
By: /s/ XXXXX X. XXXXXXXX
---------------------------------------
Name: Xxxxx X. Xxxxxxxx
-------------------------------------
Its: President
--------------------------------------
EXECUTIVE:
/s/ XXXXXX X. XXXXXX
---------------------------------------
Xxxxxx X. Xxxxxx
-4-
