TRANS WORLD ENTERTAINMENT CORPORATION RESTRICTED STOCK AGREEMENT
This RESTRICTED STOCK AGREEMENT, dated as of 9/27/99 (the "Agreement"),
is made by and between Trans World Entertainment Corporation, a New York
Corporation (the "Company"), and Xxxxxxx X. Xxxxxx (the "Employee").
WHEREAS, the Employee has been designated by the Compensation Committee of the
Company's Board of Directors (the "Committee") to participate in the Trans World
Entertainment Corporation Amended 1990 Restricted Stock Plan (the "Plan") a copy
of which the Employee acknowledges receipt of.
NOW, THEREFORE, in consideration of the premises and mutual covenants contained
herein, the parties agree as follows:
1. Award of Shares. Pursuant to the provisions of the Plan, the terms of which
are incorporated herein by reference, the Employee is hereby awarded 30,000
shares of Restricted Stock (the "Award") on and made expressly subject to the
terms and conditions herein set forth.
2. Terms and Conditions. It is understood and agreed that the Award evidenced
hereby is subject to the following terms and conditions:
a) Vesting of Award. Subject to the other terms and condition of this Agreement
and the Plan, this Award shall become vested in three installments, expressly
conditioned on complete years of continuous employment (such yearly periods to
be measured beginning September 27, 1999): 10,000 of the shares of Restricted
Stock subject to the Award shall become vested September 27, 2002; and
additional 10,000 shall become vested on September 27, 2003, and the final
10,000 shall become vested on September 27, 2004; provided, however, that, in
accordance with and subject to the Plan, the Committee may in its discretion
accelerate the vesting of the Award and/or remove any restrictions relating
thereto.
b) Vesting on Death or Disability. In the event the Employee's employment with
the Company is terminated prior to the lapse of the restrictions on his Award by
reason of death, Permanent Disability, or Retirement, the Restricted Stock
awarded hereunder shall vest in the name of the Employee as of the date of such
termination as to the full number of shares of Restricted Stock awarded
hereunder.
c) Forfeiture of Unvested Shares. In the event of the termination of the
Employee's employment with the Company for any reason whatsoever, all shares of
Restricted Stock subject to the Award that have not vested in accordance with
Section 2(a) or 2(b) above shall be forfeited by the Employee and become the
property of the Company. If the Restricted Stock is forfeited, the Company
shall be entitled to have the certificates representing the shares of Restricted
Stock redelivered to it out of the escrow provided for in Section 2(d) hereof.
d) Certificates. Each certificate issued in respect of Restricted Stock awarded
hereunder shall be deposited in escrow with the Company or its designee,
selected by the Company in the Company's sole discretion, together with a stock
power executed in blank by the Employee, and shall bear a legend disclosing the
restrictions on transferability imposed on such Restricted Stock by this
Agreement. Upon the vesting of Restricted Stock pursuant to Section 2(a) or
2(b) hereof and the satisfaction of any withholding tax liability pursuant to
Section 5 hereof, the certificates evidencing such vested Restricted stock shall
be delivered to the Employee.
e) Rights of a Shareholder. Subject to Section 3 hereof, prior to the time a
share of Restricted Stock is fully vested hereunder, the Employee shall have all
the rights of a shareholder of the Company, including the right to vote such
shares of Restricted Stock: provided, however, that unless and until the
vesting restrictions and other terms and conditions applicable to such
Restricted Stock shall be held by the Company for the Employee's account, and
interest may be paid on any such dividends, at a rate and subject to such terms
as determined by the Committee in its sole and absolute discretion. If
Restricted Stock is forfeited pursuant to the terms of this Agreement, the
related dividends and interest, if any, shall likewise be forfeited to the
Company.
f) No Right to Continued Employment. Neither the Plan, this Agreement, this
Award nor any other action taken pursuant to the Plan shall constitute or be
evidence of any agreement or understanding, express or implied, that the
Employee has a right to continue as an Employee for any period of time, or at
any rate of compensation, and shall not in any way interfere with the right of
the Company to terminate the Employee's employment at any time.
3. Restrictions on Transfer of Shares. Neither the shares of Restricted Stock
delivered hereunder nor any interest in them may be sold, assigned, disposed of,
pledged, hypothecated, encumbered or in any other manner transferred, in whole
or in part, until the vesting provisions herein and in the Plan have been
satisfied, and thereafter only if all of the following conditions have been
satisfied:
a) The listing, or approval for listing upon notice of issuance, that may be
required of such shares on any securities exchange as may at the time be the
principal market for the shares;
b) Any registration or other qualification of such shares under any state or
federal law or regulation, or the maintaining in effect of any such registration
or other qualification or an exemption therefrom supported by an opinion of
counsel, which the board of directors shall, in its absolute discretion upon the
advice of counsel, deem necessary or advisable, including expiration of any
requisite holding period under Rule 144 under the Securities Act of 1933, as
amended (the "Securities Act"); and
c) The obtaining of any other consent, approval or permit for any state or
federal governmental agency which the board of directors shall, in its absolute
discretion based upon the advice of counsel, determine to be necessary or
advisable.
4. Legend on Restricted Stock. All certificates representing shares of
Restricted Stock, unless such shares are registered under the Securities Act,
shall bear the following legend or such other legend as the Company deems
appropriate:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED WITH THE
SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933 AND MAY NOT
BE OFFERED OR SOLD IN THE ABSENCE SUCH REGISTRATION OR THE AVAILABILITY OF AN
EXEMPTION FROM SUCH REGISTRATION.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS AND VESTING CONDITIONS SET FORTH IN A RESTRICTED STOCK AGRTEEMENT
MAINTAINED WITH THE SECRETARY OF THE COMPANY.
Any certificate issued at any time in exchange or substitution for any
certificate bearing such legend or such other legend deemed appropriate by the
Company shall also bear such legend unless, in the opinion of counsel for the
Company, the securities represented thereby need no longer be subject to the
restriction contained herein. The provisions of this Section 4 shall be binding
upon all subsequent holders of certificates bearing the above legend.
5. Acquisition for Investment. The Employee represents and warrants that he is
acquiring the shares of Restricted stock distributed hereby as an investment and
not with a view to distribution thereof. The Company also reserves the right to
place legend or other symbol on the share certificates issued or transferred
pursuant to this Agreement and the Plan and to furnish any stop transfer or
similar instructions to the transfer agent for its share with the Company, in
its sole discretion, may deem necessary and proper to ensure compliance with the
above representation and warranty.
6. Adjustment Provisions. If the shares of Common Stock outstanding are
changed, such that its effect in any fiscal year is greater than 5% of the
Company's Common Stock capitalization, in number or class, by reason of a
split-up, merger, consolidation, reorganization, reclassification,
recapitalization, or any capital adjustment, including a stock dividend, or
other similar change is made in the corporate structure, appropriate adjustments
shall be made in the aggregate number and kind of shares or the securities or
property subject to this Agreement and the Plan.
7. Withholding. The Employee agrees that there shall be deducted from any
distribution of Restricted stock under this agreement the amount of any tax
required by any governmental authority to be withheld and paid over by the
Company to such governmental authority for the account of the Employee. With
respect to any distribution of Restricted Stock, the Company shall have the
right to sell without notice, such number of shares of the Restricted Stock,
distributable to the Employee as will provide funds for the payment of any tax
so required to be paid by the Company for the Employee's account, unless prior
to such sale, the Employee shall have paid the Company the amount of such tax.
Any balance of the proceeds of such sale shall be paid to the Employee. In
effecting any such sale, the Company shall be deemed to be acting on behalf, and
for the account of, the Employee.
8. Designation of Beneficiary. The Employee may, with the consent of the
Committee, designate a person or persons to receive, in the event of his death,
any shares of Restricted stock distributable hereunder. Such designation shall
be made upon forms supplied by and delivered to the Company and may be revoked
in writing. If the Employee fails effectively to designate a beneficiary, then
his estate shall be deemed to be his beneficiary.
9. References. References herein to rights and obligations of the Employee
shall apply, where appropriate, to the Employees legal representative,
designated beneficiary or estate without regard to whether specific reference to
such legal representative, designated beneficiary or estate is contained in a
particular provision of this Agreement.
10. Notices. Any notice required or permitted to be given under this Agreement
shall be in writing and shall be deemed to have been given when delivered
personally or by courier, or sent by certified or registered mail, postage
prepaid, return receipt requested, duly addressed to the party concerned at the
address indicated below or to such changed address as such party may
subsequently by similar process give notice of:
If to the Company: If to the Employee:
Trans World Entertainment Corporation Xxxxxxx Maddden
00 Xxxxxxxxx Xxxxxx 00 Xxxx Xxxxx
Xxxxxx, XX 00000 Xxxxxx, XX 00000
Attn: Secretary
11. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without regard to its
principles regarding conflict of laws.
12. Counterparts. This Agreement may be executed in two counterparts each of
which shall constitute one and the same instrument.
13. Severability. If any provision or any term or condition of this Agreement
or any application thereof to any person or circumstances is invalid, such
provision, term, condition, or application shall to that extent be void (or, in
the discretion of the Committee, such provision, term or condition may be
amended to avoid such invalidity), and shall not affect other provisions, terms
or conditions or applications thereof, and to this extent such provisions, terms
and conditions are severable.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first set forth above.
TRANS WORLD ENTERTAINMENT CORPORATION EMPLOYEE
By: _________________________ By: _____________________
Xxxxxx X. Xxxxxxx, Chairman Xxxxxxx X. Xxxxxx
and Chief Executive Officer
