EXHIBIT 10.5
EMPLOYEE RESTRICTED STOCK
PURCHASE AGREEMENT
Agreement, made this 23rd day of June, 1994, between XXXX Furniture, Inc.,
a North Carolina corporation (the "Company"), and Xxxxxxx X. Xxxxx (the
"Employee").
For valuable consideration, receipt of which is acknowledged, the parties
agree as follows:
1. Purchase of Shares. The Employee subscribes for and, upon acceptance,
shall purchase, subject to the terms and conditions set forth in this
Agreement,3,000 shares (the "Shares") of common stock ("common stock"), $.10 par
value, of the Company at a purchase price of $.10 per share. The aggregate
purchase price of the Shares shall be paid by the Employee by check, payable to
the order of the Company, or such other method as may be acceptable to the
Company. Upon the Company's receipt of payment for the Shares, the Company shall
issue to the Employee one or more certificates in the name of the Employee for
that number of Shares purchased by the Employee. The Employee agrees that the
Shares shall be subject to the Re-purchase Option set forth in Section 2 of this
Agreement and the restrictions on transfer set forth in Section 4 of this
Agreement.
2. Re-purchase Option.
(a) If the Employee ceases to be employed by the Company for any reason
other than death or disability or ceases to be employed by the Company in an
appropriate executive capacity (as determined by the Company in its sole
discretion), prior to July 1, 1999 the Company shall have the right and option
(the "Re-purchase Option") to purchase any or all of the Shares from the
Employee at the same price as the Employee paid for the Shares.
(b) For purposes of this Agreement, employment with the Company shall
include employment with a parent or subsidiary of the Company.
3. Exercise of Re-purchase Option and Closing.
(a) The Company may exercise the Re-purchase Option by delivering or
mailing to the Employee in accordance with Section 14, written notice of
exercise within 60 days after the termination of the employment of the Employee
with the Company or the date upon which the Employee ceases to be employed in an
appropriate executive capacity (as determined by the Company in its sole
discretion). This notice shall specify the number of Shares to be purchased. If
and to the extent the Re-purchase Option is not exercised within the 60-day
period, the Re-purchase Option shall automatically expire, effective upon the
expiration of the 60-day period.
(b) Within 10 days after his receipt of the Company's notice of the
exercise of the Re-purchase Option pursuant to Subsection 3(a), the Employee
shall tender to the Company at its principal offices the certificate or
certificates representing the Shares that the Company has elected to purchase,
duly endorsed in blank by the Employee or with duly endorsed stock powers
attached, all in form suitable for the transfer of the Shares of the Company.
Upon its receipt of these Shares, the Company shall deliver or mail to the
Employee a check in the amount of the aggregate Option Price.
(c) After the time when any Shares are required to be delivered to the
Company for transfer to it pursuant to Subsection 3(b), the Company shall not
pay any dividend to the Employee on account of those Shares, or permit the
employee to exercise any of the privileges or rights of a stockholder with
respect to those shares, but shall, insofar as permitted by law, treat the
Company as the owner of the Shares.
(d) The Option Price may be payable, at the discretion of the company, in
cancellation of all or a portion of any outstanding indebtedness of the Employee
to the Company, or in cash (by check), or both.
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4. Restrictions on Transfer:
(a) Except as otherwise provided in Subsection 4(b), the Employee shall
not, during the term of the Re-purchase Option, sell, assign, transfer, pledge,
hypothecate, or otherwise dispose of, by operation of law or otherwise
(collectively "transfer"), any of the Shares, or any interest therein, unless
the Shares are no longer subject to the Re-purchase Option.
(b) Notwithstanding the foregoing, the Employee may transfer Shares to or
for the benefit of any spouse, child or grandchild, or to a trust for their
benefit, provided that those Shares shall remain subject to this Agreement,
including without limitation the restrictions on transfer set forth in this
Section 4 and the Re-purchase Option, and the permitted transferee shall, as a
condition to the transfer, deliver to the Company a written instruction
confirming that the transferee shall be bound by all of the terms and conditions
of this Agreement.
5. Effect of Prohibited Transfer. The Company shall not be required:
(a) To transfer on its books any of the Shares that shall have been sold or
transferred in violation of any of the provisions set forth in this Agreement;
or
(b) To treat as owner of those Shares or to pay dividend to any transferee
to whom any of those Shares shall have been sold or transferred.
6. Restricted Legend. All certificates representing Shares shall have
affixed thereto a legend in substantially the following form, in addition to any
other legends that may be required under federal or state securities laws:
The shares of stock represented by this certificate are
subject to restrictions on transfer and an option to
purchase set forth in a Stock Restriction Agreement
between the corporation and the
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registered owner of this certificate (or his predecessor
in interest). This Agreement is available for inspection
without charge atthe office ofthe Secretary ofthe
corporation.
7. Investment Representations. The Employee represents, warrants, and
covenants as follows:
(a) The Employee is purchasing the Shares for his own account for
investment only, and not with a view to, or for sale in connection with, any
distribution of the Shares in violation of the Securities Act of 1933 (the
"Securities Act"), or any rule or regulation under the Securities Act.
(b) He has had an opportunity he deems adequate to obtain from
representatives of the Company the information necessary to permit him to
evaluate the merits and risks of his investment in the Company.
(c) He has sufficient experience in business, financial and investment
matters to be able to evaluate the risks involved in the purchase of the Shares
and to make an informed investment decision with respect to that purchase.
(d) He can afford a complete loss of the value of the Shares and is able to
bear the economic risk of holding the Shares for an indefinite period.
(e) He understands that:
(i) The Shares have not been registered under the Securities Act and
are "restricted securities" within the meaning of Rule 144 under the
Securities Act;
(ii) The Shares cannot be sold, transferred, or otherwise disposed of
unless they are subsequently registered under the Securities Act or an
exemption from registration is then available;
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(iii) In any event, the exemption from registration under Rule 144
will not be available for at least two years and even then will not be
available unless a public market then exists for the Common Stock, adequate
information concerning the Company is then available to the public, and
other terms and conditions of Rule 144 are complied with; and
(iv) The Company has no obligation or current intention to register
the Shares under the Securities Act.
(f) A legend substantially in the following form will be placed on the
certificate representing the Shares:
The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended,
and may not be sold, transferred or otherwise disposed
of in the absence of an effective registration statement
under the Act or an opinion of counsel satisfactory to
the corporation to the effect that registration is not
required.
8. Adjustments. If from time to time during the term of the Re-purchase
Option there is any stock split, stock dividend, stock distribution, or other
reclassification of the Common Stock of the Company, or any merger,
consolidation, or sale of substantially all of the assets of the Company, any
and all new, substituted, or additional securities to which the Employee is
entitled by reason of his ownership of the Shares shall be subject immediately
to: The Re-purchase Option (and be included as "Shares"), the restrictions on
transfer, and other provisions of this Agreement in the same manner and to the
same extent as the Shares, and the Option Price shall be adjusted appropriately.
9. Withholding Taxes.
(a) The Employee acknowledges and agrees that the Company has the right to
deduct from payments of any kind otherwise due to the Employee any federal,
state or local taxes of any kind required by law to be withheld with respect to
the purchase of the Shares by the Employee.
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(b) If the Employee elects, in accordance with Section 83(b) of the
Internal Revenue Code of 1954, as amended, to recognize ordinary income in the
year of acquisition of the Shares, the Company will require at the time of
that election an additional payment for withholding tax purposes based on the
difference, if any between the purchase price for the Shares and the fair market
value of the Shares as of the day immediately preceding the date of the purchase
of the Shares by the Employee.
10. Severability. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, and each other provision of this Agreement shall be
severable and enforceable to the extent permitted by law.
11. Waiver. Any provision contained in this Agreement may be waived, either
generally or in any particular instance, by the Board of Directors of the
Company.
12. Binding Effect. This Agreement shall be binding upon, and inure to the
benefit of, the Company and the Employee and their respective heirs, executors,
administrators, legal representatives, successors, and assigns, subject to the
restrictions on transfer set forth in Section 4 of this Agreement.
13. No Rights to Employment. Nothing contained in this Agreement shall be
construed as giving the Employee any right to be retained, in any position, as
an employee of the Company.
14. Notice. All notices required or permitted hereunder shall be in writing
and deemed effectively given upon personal delivery or upon deposit in the
United States Post Office, by registered or certified mail, postage prepaid,
addressed to the other party at the address shown beneath his or its respective
signature to this Agreement, or at such other address or addresses as either
party shall designate to the other in accordance with this Section 14.
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15. Pronouns. Whenever the context may require, any pronouns used in this
Agreement shall include the corresponding masculine, feminine, or neuter forms.
The singular form of nouns and pronouns shall included the plural, and the
plural form of nouns and pronouns shall include the singular.
16. Entire Agreement. This Agreement constitutes the entire agreement
between the parties, and supersedes all prior agreements and understandings
relating to the subject matter of this Agreement.
17. Amendment. This Agreement may be amended or modified only by a written
instrument executed by both the Company and the Employee.
18. Governing Law. This Agreement shall be construed, interpreted, and
enforced in accordance with the laws of North Carolina.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
COMPANY
XXXX FURNITURE, INC.
By:____________________________________
Chairman and Chief Executive Officer
Address: P. X. Xxx XX-0
Xxxx Xxxxx, XX 00000
EMPLOYEE
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Address:________________________________
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Social Sec. No.___________________________
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