RESTRICTED STOCK AGREEMENT
THIS RESTRICTED STOCK AGREEMENT (the "Agreement") is made effective as of
[__________ __, ________] (the "Effective Date"), by and between
Books-A-Million, Inc., a Delaware corporation (the "Company"), and
__________________, an employee of the Company (the "Participant"):
WHEREAS, the Company adopted the Books-A-Million, Inc. Executive Incentive
Plan (as it may be amended from time to time, the "Plan") (the terms of which
are hereby incorporated by reference and made a part of this Agreement) in order
to provide selected key management employees with incentives to assist the
Company in reaching its financial and strategic objectives;
WHEREAS, the Committee (as defined in Section 2(f) of the Plan) has
determined that it would be to the advantage and in the best interest of the
Company and its stockholders to assign certain shares of Common Stock (as
defined herein) subject to certain restrictions thereon to the Participant as an
incentive for the Participant's future services to the Company, subject to the
restrictions set forth herein, and has advised the Company thereof;
NOW, THEREFORE, in consideration of the mutual covenants herein contained
and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto do hereby agree as follows:
ARTICLE I.
DEFINITIONS
Wherever the following terms are used in this Agreement, they shall have
the meaning specified below unless the context clearly indicates to the
contrary. Capitalized terms used in this Agreement and not defined below shall
have the meaning given such terms in the Plan. The singular pronoun shall
include the plural, where the context so indicates.
Section 1.1 "Affiliate" shall mean any entity which directly or indirectly
controls, is controlled by, or is under common control with the Company.
Section 1.2 "Board" shall mean the Board of Directors of the Company.
Section 1.3 "Cause" shall mean a felony conviction of the Participant or
the failure of the Participant to contest prosecution for a felony, the
Participant's willful misconduct or dishonesty, the Participant's willful
neglect of duties, or breach of confidentiality and nondisclosure agreements
between the Participant and the Company, any of which is directly and materially
harmful to the business or reputation of the Company or any Subsidiary or
Affiliate.
Section 1.4 "Change in Control" shall mean (a) the acquisition of the power
to direct, or cause the direction of, the management and policies of the Company
by a person (not previously possessing such power), acting alone or in
conjunction with others, whether through the ownership of Common Stock, by
contract or otherwise, or (b) the acquisition, directly or indirectly, of the
power to vote more than fifty percent (50%) of the outstanding Common Stock by
any person or by two or more persons acting together. For purposes of this
definition, (i) the term "person" means a natural person, corporation,
partnership, joint venture, trust, government or instrumentality of a
government, and (ii) customary agreements with or between underwriters and
selling group members with respect to a bona fide public offering of Common
Stock shall be disregarded.
Section 1.5 "Code" shall mean the Internal Revenue Code of 1986, as
amended.
Section 1.6 "Committee" shall have the meaning set forth in the Recitals
hereto.
Section 1.7 "Common Stock" shall mean, as applicable, the common stock of
the Company, par value $.01 per share.
Section 1.8 "Company" shall mean Books-A-Million, Inc., a Delaware
corporation, and any successors to such corporation.
Section 1.9 "Disability" shall mean a permanent and total disability as
determined under procedures established by the Committee for purposes of the
Plan and this Agreement. The determination of disability for purposes of the
Plan and this Agreement shall not be construed to be an admission of disability
for any other purpose.
Section 1.10 "DRO" shall mean a qualified domestic relations order as
defined by the Code or Title I of the Employee Retirement Income Security Act of
1974, as amended, or the rules thereunder.
Section 1.11 "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
Section 1.12 "Fair Market Value" means, as of any specified date, (a) the
mean of the high and low sales prices of the Common Stock reported by the
NASDAQ-National Market System on that date, (b) if the Common Stock is listed on
a national stock exchange, the price reported on the stock exchange composite
tape for that date, or (c) if no such price quotation is available, the price
which the Committee acting in good faith determines through any reasonable
valuation method that a share of Common Stock might change hands between a
willing buyer and a willing seller, neither being under any compulsion to buy or
to sell and both having reasonable knowledge of the relevant facts.
Section 1.13 "Restricted Stock" shall mean Common Stock awarded under this
Agreement, subject to certain restrictions set forth herein.
Section 1.14 "Restrictions" shall mean the restrictions on sale or other
transfer set forth in Section 4.2 and the exposure to forfeiture set forth in
Section 3.1.
Section 1.15 "Rule 16b-3" shall mean that certain Rule 16b-3 under the
Exchange Act, as such Rule may be amended from time to time.
Section 1.16 "Securities Act" shall mean the Securities Act of 1933, as
amended.
Section 1.17 "Subsidiary" shall mean any corporation in an unbroken chain
of corporations beginning with the Company if each of the corporations other
than the last corporation in the unbroken chain then owns stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock
in one of the other corporations in such chain.
ARTICLE II.
ASSIGNMENT OF RESTRICTED STOCK
Section 2.1 Assignment of Restricted Stock
In consideration of Participant's agreement to remain in the employ of the
Company and for other good and valuable consideration which the Committee has
determined to equal or exceed the par value of the Common Stock, on the
Effective Date the Company hereby assigns to the Participant [__________] shares
of Restricted Stock.
Section 2.2 Not a Contract of Employment
Nothing in this Agreement shall confer upon the Participant any right to
continue in the employ of the Company or any Subsidiary, or shall interfere with
or restrict in any way any otherwise existing rights of the Company and any
Subsidiary, which are hereby expressly reserved, to discharge the Participant at
any time for any reason whatsoever, with or without cause.
ARTICLE III.
RESTRICTIONS
Section 3.1 Vesting and Lapse of Restrictions; Forfeiture
(a) Subject to subsection (b) and Sections 3.3, 3.4 and 3.5, the shares of
Restricted Stock shall vest, and the restrictions set forth in Section 4.2 shall
cease to apply, on the first of the following events to occur:
(i) The third anniversary of the Effective Date; (ii) The death or
Disability of the Participant; (iii) The Participant's termination of employment
by the Company for any reason (including without limitation due to the
expiration of Participant's employment contract, without renewal) other than for
Cause; or (iv) A Change in Control.
(b) Notwithstanding anything herein to the contrary, in the event of the
Participant's termination of employment for any reason other than as described
in Section 3.1(a) (including without limitation due to the Participant's
resignation) prior to the third anniversary of the Effective Date, all shares of
Restricted Stock shall be forfeited as of the date of such termination of
employment.
Section 3.2 Legend
Certificates representing shares of Restricted Stock assigned pursuant to
this Agreement shall, until all Restrictions lapse or shall have been removed
and new certificates are assigned pursuant to Section 3.3, bear a legend in
substantially the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
VESTING REQUIREMENTS AND MAY BE SUBJECT TO REACQUISITION BY THE COMPANY UNDER
THE TERMS OF A RESTRICTED STOCK AGREEMENT BY AND BETWEEN BOOKS-A-MILLION, INC.
(THE "COMPANY") AND THE REGISTERED OWNER OF SUCH SHARES (THE "AGREEMENT") AND
THE BOOKS-A-MILLION, INC. EXECUTIVE INCENTIVE PLAN (THE "PLAN") (COPIES OF THE
PLAN AND THE AGREEMENT ARE ON FILE IN THE OFFICES OF THE COMPANY, 402 INDUSTRIAL
LANE, POST OFFICE BOX 19768, BIRMINGHAM, ALABAMA 35219), AND SUCH SHARES MAY NOT
BE, DIRECTLY OR INDIRECTLY, OFFERED, TRANSFERRED, SOLD, ASSIGNED, PLEDGED,
HYPOTHECATED OR OTHERWISE DISPOSED OF UNDER ANY CIRCUMSTANCES, EXCEPT PURSUANT
TO THE PROVISIONS OF THE PLAN AND THE AGREEMENT."
Section 3.3 Assignment of Certificates for Vested Shares
Upon the vesting of the shares of Restricted Stock as provided in Section
3.1 and subject to Section 4.3, the Company shall cause new certificates to be
assigned with respect to such vested shares and delivered to the Participant or
his legal representative, free from any Restrictions hereunder and free from the
legend provided for in Section 3.2. Such vested shares shall cease to be
considered Restricted Stock subject to the terms and conditions of this
Agreement. Notwithstanding the foregoing, no such new certificate shall be
delivered to the Participant or his legal representative unless and until the
Participant or his legal representative shall have paid to the Company in cash
or made provisions for payment through withholding against income, the full
amount of all federal and state (or applicable foreign) withholding or other
employment taxes applicable to the taxable income of the Participant resulting
from the grant of Restricted Stock or the lapse or removal of the Restrictions.
Section 3.4 Removal of Restrictions; Acceleration of Lapse of Restrictions,
Etc.
(a) By resolution, the Committee may, on such terms and conditions as it
deems appropriate, remove any or all of the Restrictions (including accelerate
vesting) at any time or from time to time.
(b) Subject to Section 3.5, if the shares of the Company's Common Stock as
a whole are increased, decreased, changed into or exchanged for a different
number or kind of shares or securities of the Company, whether through merger,
consolidation, reorganization, recapitalization, reclassification, stock
dividend, stock split, combination of shares, exchange of shares, change in
corporate structure or the like, the Committee, in its sole discretion, shall
have the discretion and power to determine and to make effective provision for
acceleration of the time or times at which any Restrictions shall lapse or be
removed. In addition, in the case of the occurrence of any event described in
this Section 3.4(b), the Committee, subject to the provisions of this Agreement,
shall make an appropriate and proportionate adjustment in the number and kind of
shares of Restricted Stock, to the end that after such event the Participant's
proportionate interest shall be maintained as before the occurrence of such
event. Any such adjustment made by the Committee shall be final and binding upon
the Participant, the Company and all other interested persons.
Section 3.5 Restrictions On New Shares
In the event that the Participant receives any new or additional or
different shares or securities by reason of any transaction or event described
in Section 3.4(b), such new or additional or different shares or securities
which are attributable to the Participant in his capacity as the registered
owner of the Restricted Stock then subject to Restrictions, shall be considered
to be Restricted Stock and shall be subject to all of the Restrictions, unless
the Committee provides, pursuant to Section 3.4, for the removal or lapse of the
Restrictions on the shares of Restricted Stock underlying the distribution of
the new or additional shares or securities.
ARTICLE IV.
MISCELLANEOUS
Section 4.1 Administration
The Committee shall have the power to interpret this Agreement and all
other documents relating to Restricted Stock and to adopt such rules for the
administration, interpretation and application of this Agreement as are
consistent therewith and to interpret, amend or revoke any such rules. All
actions taken and all interpretations and determinations made by the Committee
in good faith shall be final and binding upon the Participant, the Company and
all other interested persons. No member of the Committee shall be personally
liable for any action, determination or interpretation made in good faith with
respect to the Restricted Stock and all members of the Committee shall be fully
protected by the Company in respect to any such action, determination or
interpretation.
Section 4.2 Restricted Stock Not Transferable
No Restricted Stock or any interest or right therein or part thereof shall
be liable for the debts, contracts or engagements of the Participant or his
successors in interest or shall be subject to disposition by transfer,
alienation, anticipation, pledge, encumbrance, assignment or any other means
whether such disposition be voluntary or involuntary or by operation of law by
judgment, levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy), and any attempted disposition thereof shall
be null and void and of no effect; provided, however, that this Section 4.2
shall not prevent transfers by will or by applicable laws of descent and
distribution or, subject to the consent of the committee, pursuant to a DRO.
Section 4.3 Conditions to Delivery of Stock Certificates
The Company shall not be required to deliver any certificate or
certificates for shares of stock pursuant to this Agreement prior to fulfillment
of all of the following conditions:
(a) The obtaining of any approval or other clearance from any state or
federal governmental agency which the Committee shall, in its sole discretion,
determine to be necessary or advisable; and
(b) The payment by the Participant of all amounts required to be withheld,
under federal, state and local (or applicable foreign) tax laws, with respect to
the issuance or assignment of Restricted Stock and/or the lapse or removal of
any of the Restrictions; and
(c) The lapse of such reasonable period of time as the Committee may from
time to time establish for reasons of administrative convenience.
Section 4.4 Escrow
The Secretary of the Company or such other escrow holder as the Committee
may appoint shall retain physical custody of the certificates representing
Restricted Stock (but not any cash dividends or other distributions paid thereon
which dividends or distributions shall be paid by the escrow holder, as soon as
practicable, to the Participant of the applicable Restricted Stock) until all of
the Restrictions lapse or shall have been removed; provided, however, that in no
event shall the Participant retain physical custody of any certificates
representing unvested Restricted Stock assigned to the Participant.
Additionally, the Participant shall, in connection with the award of the
Restricted Shares, deliver to the Company a stock power, endorsed in blank,
relating to the Restricted Shares.
Section 4.5 Notices
Any notice required by this Agreement will be deemed provided and delivered
to the intended recipient when (a) delivered in person by hand; or (b) three
days after being sent via U.S. certified mail, return receipt requested; or (c)
the day after being sent via overnight courier, in each case provided such
notice is properly addressed to the following address and enclosed in a properly
sealed envelope or wrapper, and with all postage and similar fees having been
paid in advance.
If to the Company: Books-A-Million, Inc.
402 Industrial Lane
Post Office Box 19768
Birmingham, Alabama 35219
Attn: Rick Wallington
And if to the Participant: To the address given beneath Participant's
signature hereto.
By a notice given pursuant to this Section 4.5, either party may hereafter
designate a different address for notices to be given. Any notice which is
required to be given to the Participant shall, if the Participant is then
deceased, be given to the Participant's personal representative if such
representative has previously informed the Company of representative's status
and address by written notice under this Section 4.5.
Section 4.6 Rights as Stockholder
Except as otherwise provided herein, upon delivery of the shares of
Restricted Stock to the escrow holder pursuant to Section 4.4, the Participant
shall have all the rights of a stockholder with respect to said shares, subject
to the Restrictions herein, including the right to vote the shares and to
receive all dividends or other distributions paid or made with respect to the
shares of Restricted Stock; provided, however, that any and all shares of Common
Stock received by the Participant with respect to such Restricted Stock as a
result of stock dividends, stock splits or any other form of recapitalization
shall also be subject to the Restrictions until the Restrictions on the
underlying shares of Restricted Stock lapse or are removed pursuant to this
Agreement.
Section 4.7 Titles
Titles are provided herein for convenience only and are not to serve as a
basis for interpretation or construction of this Agreement.
Section 4.8 Conformity to Securities Laws
The Participant acknowledges that this Agreement is intended to conform to
the extent necessary with all provisions of all applicable federal and state
(and applicable foreign) laws, rules and regulations (including but not limited
to, the Securities Act and the Exchange Act and to such approvals by any
listing, regulatory or other governmental authority as may, in the opinion of
counsel for the Company, be necessary or advisable in connection therewith.
Notwithstanding anything herein to the contrary, this Agreement shall be
administered, and the Restricted Stock shall be assigned, only in such a manner
as to conform to such laws, rules and regulations including, without limitation,
Rule 16b-3. To the extent permitted by applicable law, this Agreement and the
Restricted Stock assigned hereunder shall be deemed amended to the extent
necessary to conform to such laws, rules and regulations.
Section 4.9 Amendment
This Agreement may be amended without the consent of the Participant
provided that such amendment would not impair any rights of the Participant
under this Agreement. No amendment of this Agreement shall, without the consent
of the Participant, impair any rights of the Participant under this Agreement.
Section 4.10 Governing Law
The laws of the State of Delaware shall govern the interpretation,
validity, administration, enforcement and performance of the terms of this
Agreement regardless of the law that might be applied under principles of
conflicts of laws.
Section 4.11 Section 83(b) Election
If the Participant makes an election under Section 83(b) of the Code, or
any successor section thereto, to be taxed with respect to the Restricted Stock
as of the date of transfer of the Restricted Stock rather than as of the date or
dates upon which the Participant would otherwise be taxable under Section 83(a)
of the Code, the Participant shall deliver a copy of such election to the
Company immediately after filing such election with the Internal Revenue
Service. A sample copy of such election is set forth in Annex A hereto.
[signature page follows]
IN WITNESS HEREOF, this Agreement has been executed and delivered by the
parties hereto.
BOOKS-A-MILLION, INC.,
a Delaware Corporation
By: -----------------
Name
Title, Books-A-Million, Inc.
- --------------------------
Name
Address
ANNEX A
ELECTION TO INCLUDE THE VALUE OF RESTRICTED
PROPERTY IN GROSS INCOME IN THE YEAR OF TRANSFER
This statement is being made under Section 83(b) of the Internal Revenue
Code, pursuant to Treas. Reg. Section 1.83-2.
1) The person who performed the service is:
Name:
Address:
Taxpayer I.D. Number:
Taxable Year:
2) The property with respect to which the election is being made is ____
shares of the common stock of Books-A-Million, Inc.
3) The property was granted on ________________. This election is being
made for the ___________ tax year.
4) The property is subject to a restriction period during which the
property will be forfeited upon the termination of the taxpayer's employment
with the issuer under certain circumstances. The restriction period lapses
describe time-based vesting schedule and/or performance-based vesting criteria.
5) The fair market value at the time of grant (determined without regard to
any restriction other than a restriction which by its terms will never lapse) is
$_______ per share.
6) The amount paid for such property is $_____ per share.
7) A copy of this statement was furnished to Books-A-Million, Inc. for whom
the taxpayer rendered the service underlying the transfer of property.
8) This statement is executed as of ________________________________.
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Name
Address