RESTRICTED STOCK AGREEMENT
THIS RESTRICTED STOCK AGREEMENT (this "Agreement") is made and entered into
on this 9th day of June, 1997 (hereinafter referred to as the "Effective Date"),
by and between FAC REALTY, INC., a Delaware corporation (the "Corporation"), and
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (the "Participant").
WHEREAS, prior to the Corporation's change of name to FAC Realty, Inc. the
Factory Stores of America, Inc. 1996 Restricted Stock Plan (the "Plan") was
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
1st day of March 1997 (the "Effective Date").
2. Receipt by Participant. The Participant acknowledges receipt from the
Corporation of 6,000 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 and Transfer Restrictions
(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.
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) Vesting. Subject to subparagraph 5(b) below, the Restricted Stock shall
vest and become nonforfeitable on March 1, 2000.
(b) Accelerated Vesting. Notwithstanding subparagraph 5(a) above, all
Restricted Stock previously not vested and subject to forfeiture shall vest and
the right of the Participant to such shares of the Restricted Stock shall become
nonforfeitable upon the occurrence of any of the following:
(i) Retirement of Participant. The termination of the Participant's
membership on the Board or employment by the Corporation, as applicable, by
reason
2
of retirement (as defined in the Plan).
(ii) Disability of Participant. The termination of the Participant's
membership on the Board or employment by the Corporation, as applicable, by
reason of disability (as defined in the Plan).
(iii) Death of Participant. The Participant's death during the
employment of the Participant by the Corporation.
(iv) Termination Without Cause. The termination of Participant's
employment by the Corporation "without cause" pursuant to Paragraph 2(c) or
Paragraph 5(a)(iii) of the Employment Agreement dated December 15, 1995 by
and between the Corporation and the Participant (the "Employment
Agreement") or, in the case of termination at any time following the
expiration of the Employment Agreement, termination for the reasons set
forth in Paragraph 2(c) or Paragraph 5(a)(iii) thereof.
(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.
6. Voting Rights: Dividends: Other Distributions. The Participant shall
have the full power to vote all of the Restricted Stock held by the Corporation
in the Participant's
3
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 the
Participant's 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 the Participant's 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.
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 the Participant's death. The Participant may, from time to
time, revoke or change the Participant's 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 the Participant's 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
4
the Corporation to terminate the Participant's employment at any time.
9. Adjustment Upon Changes 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
5
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 at ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇; and, if to the
Participant, at the Participant's 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.
6
16. Captions 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
Wake, 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.
7
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 party hereto has hereunto set such party's hand and adopted as
such party's seal the typewritten word "SEAL" appearing beside such party's
name, all done this the day and year first above written.
FAC REALTY, INC.
By: ______________________________
▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
President and Chief Executive
Officer
ATTEST:
__________________________
__________________________ Secretary
[Corporate Seal]
__________________________
________________________________
(SEAL)
__________________________
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
8
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 on June 9, 1997, a copy of which agreement may be obtained from
the issuer by writing to:
FAC REALTY, INC.
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Secretary
9
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ hereby sells, assigns and
transfers unto ______________________________________ Six Thousand (6,000)
Shares of the Common Stock of FAC REALTY, INC. (the "Company") standing in its
name on the books of the Company represented by Certificate(s) No.
____________________ herewith, and does hereby irrevocably constitute and
appoint attorney to transfer the said stock on the books of the Company with
full power of substitution in the premises.
Dated __________________
IN THE PRESENCE OF:
____________________________________
____________________________________ (SEAL)
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇