TRANS WORLD ENTERTAINMENT
CORPORATION
FORM OF RESTRICTED STOCK AGREEMENT
This Restricted Stock Agreement, dated as of , 1995 (the "Agreement"), is
made by and between Trans World Entertainment Corporation, a New York
corporation (the "Company"), and (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 1990 Restricted Stock Plan (the "Plan"), which
the Employee acknowledges receipt of;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, the parties hereto agree as follows.
Capitalized terms used herein and not defined shall have the meanings set
forth in the Plan.
1. Award of Shares. Pursuant to the provisions of the Plan, the terms of
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which are incorporated herein by reference, the Employee is hereby awarded
shares of Restricted Stock (the "Award"), subject to the terms and
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conditions herein set forth.
2. Terms and Conditions. It is understood and agreed that the Award
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evidenced hereby is subject to the following terms and conditions.
(a) Vesting of Award. Subject to the other terms and conditions of this
Agreement and the Plan, this Award shall become vested in one installment
on ,expressly conditioned on complete years of continuous
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employment (such yearly periods to be measured beginning , 1995);
provided, however, that in accordance with and subject to the Plan, the
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Committee may in its sole discretion accelerate the vesting of the Award
or remove any restrictions relating thereto.
(b) Vesting on Death or Disability. In the event of the termination of
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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.
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(c) Forfeiture of Unvested Shares. In the event of the termination of the
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Employee's employment with the Company for any reason whatsoever, all
shares of Restricted Stock subject to the Award which have not vested in
accordance with Section 2(a) above and do not become vested under 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 in
Section 2(d) hereof.
(d) Certificates. Each certificate issued in respect of Restricted Stock
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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
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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 the Award have lapsed or are otherwise satisfied, the
dividends 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,
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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.
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3. Restrictions on Transfer of Shares. Neither the shares of Restricted
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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
OF 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 AGREEMENT 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.
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5. Acquisition for Investment. The Employee represents and warrants that
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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 any 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 shares which 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
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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 if
any distribution is made to the holders of Common Stock other than a cash
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 other securities or property subject to this Agreement and the Plan.
7. Withholding. The Employee agrees that there shall be deducted from
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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 to 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
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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
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Employee shall apply, where appropriate, to the Employee's 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.
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10. Notices. Any notice required or permitted to be given under this
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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
38 Corporate Circle
Albany, New York 12203
Attn.: Secretary
11. Governing Law. This Agreement shall be governed by and construed in
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accordance with the laws of the State of New York, without regard to
principles regarding conflict of laws.
12. Counterparts. This Agreement may be executed in two counterparts
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each of which shall constitute one and the same instrument.
13. Severability. If any provision or any term or condition of this
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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 [Print Name of Employee]
By: /s/Robert J. Higgins
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Robert J. Higgins, Chairman
and Chief Executive Officer
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