FORM OF RESTRICTED STOCK AGREEMENT: 1996 AWARDS
PALFED, Inc.
RESTRICTED STOCK AWARD AGREEMENT
This is a Restricted Stock Award Agreement ("Agreement") dated as of
February 15, 1996 by and between PALFED, Inc., a South Carolina corporation (the
"Company"), and _________________________ (the "Employee") pursuant to the
PALFED, Inc. 1993 Restricted Stock Incentive Award Plan (the "Plan"), by which
the parties in consideration of the mutual promises set forth below and other
good and valuable consideration, the mutuality and sufficiency of which are
hereby acknowledged, hereby agree as follows:
1. BACKGROUND. The Company has adopted the Plan to provide
additional incentive compensation to its officers and other employees and to
encourage such individuals, including the Employee, to remain in the employ of
the Company. The Company desires to grant an award (the "Award") to the
Employee of shares of the Company's common stock, $1.00 par value ("Common
Stock"), as additional incentive for the Employee's services and as an
inducement to the continued services by the Employee to the Company and its
subsidiary, Palmetto Federal Savings Bank of South Carolina (the "Bank").
2. GRANT OF AWARD. Pursuant to the Plan and subject to the terms
and conditions of this Agreement and the Plan, the Company hereby grants to the
Employee an Award of _____________ shares of Common Stock subject to certain
restrictions ("Restricted Stock") (individually, a "Share" and collectively, the
"Shares").
3. RESTRICTIONS. Until expiration of the restrictions provided in
this Agreement or in the Plan, the Shares shall be subject to the following
restrictions:
(a) CONTINUED EMPLOYMENT. The Employee shall remain in the
employment of the Company or one of its subsidiaries and if, prior to the lapse
of restrictions on the Shares, the Employee's employment by the Company
terminates for any reason (including without limitation, retirement, death or
disability), the Shares shall immediately be forfeited to the Company and the
Employee shall have no further rights with respect the Shares.
(b) TRANSFER. The Shares may not be sold, assigned,
transferred, exchanged, pledged, hypothecated, or otherwise encumbered in any
manner by the Employee.
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4. LAPSE OF RESTRICTIONS.
(a) GENERAL. Subject to the terms of this Agreement,
restrictions on the Shares shall expire only upon the Employee's qualification
for annual performance bonuses as determined from time to time by the Company's
Personnel and Compensation Committee (the "Committee"). The Company anticipates
that the restrictions on the Shares shall expire over a [_____] (__) year period
at the annual rate of [total shares divided by vesting period] (___________) of
the number of Shares subject to this Award and the Employee shall receive the
Shares on which restrictions expire in connection with the Employee's annual
incentive bonus. During the term of this Agreement, the Company may reduce the
cash portion of any annual incentive bonus paid to the Employee by an amount
equal to the value of the number of Shares that vest in such year, together with
any applicable income tax due on such Shares. The Employee acknowledges that in
any year in which either (i) the Committee does not award incentive bonuses, or
(ii) the Employee does not qualify for an incentive bonus, the Employee shall
forfeit the portion of the Shares upon which restrictions were due to lapse in
such year.
(b) VESTING SCHEDULE. Commencing on February 15, 1997 and on or
about February 15 of each year thereafter, the restrictions shall expire on the
number of Shares that are equal to the LESSER of:
(i) [_____] Shares ((________) of the aggregate number of
Shares subject to the Award); or
(ii) the number of Shares calculated by dividing the
Employee's aggregate annual incentive bonus by $12.75 and rounding up
to the nearest whole share.
Notwithstanding the foregoing, the Company may defer the vesting period to a
later date if the Committee has not determined whether to award incentive
bonuses or determines in its discretion to delay or change the timing of such
bonuses.
Set forth on Schedule A to this Agreement is an estimated vesting
schedule for the Employee's Award. The Employee acknowledges that Schedule A is
an estimate and is prepared for illustrative purposes only.
(c) FORFEITURE OF SHARES. If the number of Shares calculated in
accordance with subsection (b)(ii) above is less than [__________], then the
Employee shall forfeit the number of Shares equal to the difference between
[___________] and the number of Shares calculated in subsection (b)(ii) above.
In the event the Committee does not award an incentive to the Employee in any
calendar year, then the Employee shall forfeit any of
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the Shares on which restrictions were due to expire. In addition, the Employee
shall forfeit all of the Shares subject to restrictions upon the Employee's
termination of employment with the Company or any of its subsidiaries for any
reason with or without cause, including termination because of death,
retirement or disability.
(d) VALUE OF SHARES. For purposes of calculating the number of
Shares in subsection (b) on which restrictions expire each year and the number
of Shares that are to be credited against the cash portion of any future annual
incentive bonus awarded to the Employee, the Shares shall be valued at $12.75
per Share, which amount represents the fair market value of a share of Common
Stock as of the date of the grant of this Award.
(e) TERMINATION OF RESTRICTIONS. Notwithstanding the foregoing,
the Committee shall have the power, in its sole discretion, to accelerate the
expiration of the applicable restriction period, to waive any restriction with
respect to any part or all of the Shares, or to waive the forfeiture of Shares
and to retain restrictions on Shares that would have been forfeited pursuant to
the terms of this Agreement.
5. CERTIFICATES. Each certificate issued in respect of the Shares
shall be registered in the name of Employee and deposited with the Company or
its designee and shall bear the following legend:
"This certificate and the shares of common stock represented
hereby are subject to the terms and conditions (including
forfeiture and restrictions against transfer) contained in the
PALFED, Inc. Restricted Stock Incentive Award Plan and an
Agreement entered into between PALFED, Inc. and the registered
owner. Release from such terms and conditions shall be obtained
only in accordance with the provisions of the Plan and Agreement,
copies of which are on file in the office of the Secretary of
PALFED, Inc., Aiken, South Carolina."
6. SECTION 83 ELECTION. The Employee agrees not to file an election
under Section 83(b) of the Internal Revenue Code of 1986, as amended, with
respect to the Shares.
7. CHANGE OF CONTROL. All restrictions with respect to any of the
Shares that have not been previously forfeited as provided in this Agreement,
shall expire and lapse upon the occurrence of: (i) a tender offer or exchange
offer has been made for at least 15% of the outstanding shares of Common Stock,
other than one made by the Company, provided that the corporation, person or
other entity making such offer purchases or otherwise acquired shares of Common
Stock pursuant to such offer; or (ii) any person, entity or "group," within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
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Act of 1934, as amended (the "Exchange Act") (excluding, for this purpose, any
employee benefit plan of the Company or its subsidiaries which acquires
beneficial ownership of voting securities of the corporation) acquires (other
than in a transaction approved by at least two-thirds of the "Incumbent Board"
as defined below) beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 15% or more of either the then
outstanding shares of Common Stock or the combined voting power of the Company's
then outstanding voting securities entitled to vote generally in the election of
directors; (iii) the individuals who constitute the Incumbent Board fail for any
reason to continue to constitute at least two-thirds of the Board of Directors,
or (iv) the Board of Directors approves a definitive agreement (the "Agreement")
to merge or consolidate with or into another corporation pursuant to which the
Company will not survive or will survive only as a subsidiary of another
corporation or to sell or otherwise dispose of all or substantially all of its
assets. If any of the events specified in this Section 7 have occurred, all
restrictions on the Shares shall expire: (x) in the event of (i) above, on or
after the date on which shares are purchased pursuant to such tender or exchange
offer; or (y) in the event of (ii) above, at any time after the date upon which
the Company is provided a copy of Schedule 13D (filed pursuant to Section 13(d)
of the Exchange Act and the rules and regulations promulgated thereunder) or
other notice indicating that any person, entity or group has become the holder
of 15% or more of the outstanding shares of Stock, or, if the Company is not
subject to Section 13(d) of the Exchange Act, at any time after the date upon
which the Company receives written notice that any person, entity or group has
become the holder of 15% or more of the outstanding shares of Company Stock, or
(z) in the event of (iii) or (iv) above, on or after the occurrence of such
event.
For purposes of this Agreement, the "Incumbent Board" shall mean the
members of the Board of Directors as of February 15, 1996 and any person
becoming a member of the Board of Directors hereafter whose election, or
nomination for election by the Company's shareholders, was approved by a vote of
at least two-thirds of the directors then comprising the Incumbent Board (other
than an election or nomination of an individual whose initial assumption of
office is in connection with an actual or threatened election contest relating
to the election of the directors of the Company, as such terms are used in Rule
14a-11 of Regulation 14A promulgated under the Exchange Act).
8. INCORPORATION OF PLAN; DEFINED TERMS. The Plan is incorporated
herein by reference and made a part of this Agreement. The terms and conditions
of the Plan shall govern with respect to any matter not expressly addressed in
this Agreement. Notwithstanding Section 5(a) of the Plan, the Employee
expressly acknowledges that the restrictions on the Shares shall not expire upon
the Employee's retirement, death or disability. Unless otherwise expressly
defined in this Agreement, all capitalized terms in this Agreement shall have
the meanings given such terms in the Plan.
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9. MISCELLANEOUS.
(a) SUCCESSORS; GOVERNING LAW. This Agreement shall bind and
inure to the benefit of the parties, their heirs, personal representative,
successors in interest and assigns. This Agreement shall be governed by and
construed in accordance with the laws of the State of South Carolina.
(b) INCENTIVE BONUS PROGRAM. The Committee in its sole
discretion may determine whether to award incentive bonuses to any employee or
to award the performance criteria for awarding annual incentive bonuses.
Nothing in this Agreement shall be construed to limit the right of the Company
to amend or terminate the Plan or its incentive compensation programs.
(c) DIVIDENDS. The Company shall have the discretion to pay to
the Employee any special or regular cash dividends declared by the Board of
Directors, or to defer the payment of cash dividends until the expiration of the
restrictions with respect to the Shares, or reinvest such amounts in additional
shares of Restricted Stock.
(d) CONTINUED EMPLOYMENT. The Agreement does not constitute a
contract of employment. Participation in the Plan does not give the Employee
the right to remain in the employ of the Company or a subsidiary and does not
limit in any way the right of the Company or a subsidiary to change the duties
or responsibilities of the Employee.
(e) AMENDMENT. The Company may amend this Agreement or modify
the provisions for the termination of the restrictions on the Shares without the
approval of the Employee to comply with any rules or regulations under
applicable tax or securities laws, or to correct any omission in this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement,
effective as of the date set forth below.
PALFED, Inc.
May __, 1996 By:
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Title: President
Address: 107 Chesterfield Street South
Aiken, South Carolina 29801
EMPLOYEE'S ACCEPTANCE
The undersigned hereby accepts the Award of Restricted Stock and
agrees to the terms and conditions of this Agreement and the Plan. The
undersigned hereby acknowledges receipt of a copy of the Plan and Plan
Prospectus.
EMPLOYEE
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Name:-------------------------------------
Address:----------------------------------
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