EXHIBIT 10.42
EMPLOYEE
RESTRICTED STOCK AWARD AGREEMENT
PURSUANT TO THE
TANDY BRANDS ACCESSORIES, INC. 2002 OMNIBUS PLAN
This EMPLOYEE RESTRICTED STOCK AWARD AGREEMENT is made as of this ____ day
of ___________, __________ (the "Date of Grant"), between Tandy Brands
Accessories, Inc., a Delaware corporation (the "Company"), and ___________, an
employee of the Company or one of its subsidiaries ("Employee").
W I T N E S S E T H:
WHEREAS, the Company desires to carry out the purposes of the Tandy Brands
Accessories, Inc. 2002 Omnibus Plan (the "Plan") by awarding Employee with
shares of the common stock, $1.00 par value per share ("Common Stock"), of the
Company.
NOW THEREFORE, in consideration of the mutual covenants hereinafter set
forth and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
1. Grant of Award. Pursuant to the Plan, the Company hereby grants
_________ shares of Common Stock (the "Restricted Shares") to Employee to be
issued as hereinafter provided in Employee's name subject to certain
restrictions thereon as hereinafter set forth.
2. Issuance and Delivery of Restricted Shares. The Restricted Shares shall
be issued upon acceptance and execution hereof by Employee and upon satisfaction
of the terms of this Agreement. The certificates representing the Restricted
Shares awarded hereunder shall be held in escrow by the Assistant Secretary of
the Company as provided in Section 10.
3. Vesting of Restricted Shares. The Restricted Shares shall become fully
vested and shall no longer be subject to forfeiture upon the third anniversary
of the Date of Grant.
4. Forfeiture of Restricted Shares. Upon Employee's voluntary or
involuntary Termination of Service (as defined in the Plan) for any reason or
for no reason, including, without limitation, upon the death or Total and
Permanent Disability (as defined in the Plan) of Employee, all nonvested
Restricted Shares held by Employee shall, immediately upon the occurrence of
such event, be forfeited and, except as provided in Section 5 below, no
compensation or other amounts shall be paid to Employee with respect thereto.
Such forfeited Restricted Shares shall cease to be outstanding and shall no
longer confer on Employee any rights as a stockholder with respect to the
forfeited Restricted Shares as of the date of forfeiture and upon such
forfeiture, Employee shall cease to have any further rights or claims with
respect to such forfeited Restricted Shares.
5. Repurchase of Shares in Case of Forfeiture.
(a) In the event Employee has paid any consideration (such
consideration hereinafter referred to as the "Purchase Price") to the
Company for the Restricted Shares, upon Employee's forfeiture of
Restricted Shares as a result of an event described in Section 4 hereof,
the Company shall repurchase all of such forfeited Restricted Shares
and each such forfeited Restricted Share shall be returned to the Company
as contemplated by the Plan. The repurchase price of the Restricted Shares
to be sold to the Company under this Section 5 (the "Repurchase Price")
shall be equal to the Purchase Price paid by Employee for the Restricted
Shares that have been forfeited.
(b) The Company shall repurchase the Restricted Shares as soon as is
administratively practical (but in any event within five (5) business days
after the event of forfeiture) by the tender to Employee of the Repurchase
Price. Tender of the Repurchase Price to Employee shall be effected by
delivery via certified mail of a check in the amount of the Repurchase
Price.
(c) The Repurchase Price shall be paid to Employee only after the
Company has received from Employee all necessary assignments (including
the Assignment Separate From Certificate in the form of Exhibit A),
endorsements, certificates of authority, tax releases, consents to
transfer, instruments and evidences of title as may be reasonably required
by the Company and its counsel.
(d) If the Company (or its assignees) shall make available, at the
time and place and in the amount and form provided in this Agreement, the
Repurchase Price for the Restricted Shares to be repurchased in accordance
with the provisions of this Section 5, then from and after such time, the
person from whom such Restricted Shares are to be repurchased shall no
longer have any rights as a holder of such shares (other than the right to
receive payment of such Repurchase Price in accordance with this Section 5
and the Plan), and such shares shall be deemed purchased in accordance
with the applicable provisions hereof and the Company (or its assignees)
shall be deemed the owner and holder of such Restricted Shares, whether or
not the certificates therefor have been delivered as required by this
Agreement.
6. Restrictions on Transfer.
(a) The Restricted Shares may not be resold, pledged as security or
otherwise transferred, assigned or encumbered by Employee prior to the
date such Restricted Shares are no longer subject to forfeiture, unless
specifically agreed in writing by the Company.
(b) Employee hereby agrees that Employee shall make no disposition
of the Restricted Shares unless and until:
(1) The forfeiture restrictions applicable to such Restricted
Shares have lapsed;
(2) Employee shall have notified the Company of the proposed
disposition and provided a written summary of the terms and
conditions of the proposed disposition, unless there is then in
effect a registration statement under the Securities Act of 1933
(the "Securities Act") covering such proposed disposition and such
disposition is made in accordance with such registration statement;
(3) Employee shall have complied with all requirements of this
Agreement applicable to the disposition of the Restricted Shares;
and
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(4) If reasonably requested by the Company, Employee shall
have provided the Company an opinion of counsel in form and
substance satisfactory to the Company, that (A) the proposed
disposition does not require registration of the Restricted Shares
under the Securities Act or (B) all appropriate action necessary for
compliance with the registration requirements of the Securities Act
or of any exemption from registration available under the Securities
Act (including Rule 144) has been taken, provided, however, that in
no event shall an opinion of counsel be required if there is then in
effect a registration statement under the Securities Act covering
such proposed disposition.
(c) The Company shall not be required (i) to transfer on its books
any Restricted Shares that have been sold or transferred in violation of
the provisions of this Section 6, or (ii) to treat as the owner of the
Restricted Shares, or otherwise to accord voting or dividend rights to,
any transferee to whom the Restricted Shares have been transferred in
contravention of this Agreement. References herein to Employee shall
include, where applicable, a permitted transferee.
7. Restrictive Legend. In order to reflect the restrictions on transfer of
the Restricted Shares, the stock certificates for the Restricted Shares will be
endorsed with the following legend:
On the face of the certificate:
"Transfer of this stock is restricted in accordance with
conditions printed on the reverse of this certificate."
On the reverse:
"The shares of stock evidenced by this certificate are
subject to and transferable only in accordance with that
certain Tandy Brands Accessories, Inc. 2002 Omnibus
Plan, a copy of which is on file at the principal office
of the Company in Arlington, Texas. No transfer or
pledge of the shares evidenced hereby may be made except
in accordance with and subject to the provisions of said
Plan. By acceptance of this certificate, any holder,
transferee or pledgee hereof agrees to be bound by all
of the provisions of said Plan."
8. Investment Representations. In connection with the grant of the
Restricted Shares, Employee represents to the Company the following:
(a) Employee is accepting the Restricted Shares for Employee's own
account, not as a nominee or agent, and not with a view to the resale or
distribution of any part thereof, and that Employee has no present
intention of selling, granting any participation in, or otherwise
distributing the Shares. By executing this Agreement, Employee further
represents that Employee does not have any contract, undertaking,
agreement or arrangement with any person to sell, transfer or grant
participations to such person or to any third person with respect to any
of the Restricted Shares.
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(b) Employee understands that the Restricted Shares are
characterized as "restricted securities" under the Securities Act and may
not be resold or transferred unless the Restricted Shares are first
registered under the federal securities laws or unless an exemption from
such registration is available. Accordingly, Employee hereby acknowledges
that Employee is prepared to hold the Restricted Shares for an indefinite
period and that Employee is aware that Rule 144 of the Securities and
Exchange Commission promulgated under the Securities Act is not presently
available to exempt the sale of the Restricted Shares from the
registration requirements of the Securities Act.
9. Stockholder Rights. Unless and until such time as the Restricted Shares
are forfeited by Employee pursuant to Section 4, Employee shall have all the
rights of a stockholder, including voting and dividend rights, with respect to
the Restricted Shares, including the Restricted Shares held in escrow under
Section 10, subject, however, to the transfer restrictions of Section 6.
10. Escrow.
(a) Deposit. Upon issuance, the certificates for the Restricted
Shares shall be deposited in escrow with the Assistant Secretary of the
Company to be held in accordance with the provisions of this Section 10.
Each deposited certificate shall be accompanied by a duly executed
Assignment Separate from Certificate in the form of Exhibit A. The
deposited certificates, together with any other assets or securities that
may be deposited from time to time with the Company pursuant to the
requirements of the Plan, shall remain in escrow until such time or times
as the certificates (or other assets or securities) are to be released or
otherwise surrendered for cancellation in accordance with the Plan. Upon
delivery of the certificates (or other assets or securities) to the
Company, Employee shall be issued an instrument of deposit acknowledging
the number of Restricted Shares (or other assets or securities) delivered
in escrow to the Assistant Secretary of the Company.
(b) Release or Surrender. The Restricted Shares, together with any
other assets or securities held in escrow hereunder, shall be subject to
the following terms and conditions relating to their release from escrow
or their surrender to the Company for repurchase and/or cancellation:
(1) As the interest of Employee in the Restricted Shares (or
any other assets and securities issued with respect thereto) vests
in accordance with Section 3, the certificates for such vested
shares (as well as all other assets and securities issued with
respect thereto) shall be released from escrow and delivered to
Employee within 5 business days following the date such Restricted
become so vested, provided such Restricted Shares have not been
forfeited pursuant to Section 4.
(2) Upon Employee's Termination of Service (as defined in the
Plan), any escrowed Restricted Shares (or other assets and
securities issued with respect thereto) in which Employee is at the
time vested shall be promptly released from escrow, provided such
Restricted Shares have not been forfeited pursuant to Section 4.
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(3) Should Employee forfeit Restricted Shares pursuant to
Section 4, then the escrowed certificates for such forfeited
Restricted Shares (as well as all other assets and securities issued
with respect thereto) shall be surrendered to the Company for
cancellation concurrently with such forfeiture. Should the Company
be required to repurchase the forfeited Restricted Shares pursuant
to Section 5, then, concurrently with the payment of the Repurchase
Price to Employee for such forfeited Restricted Shares (and all
other assets and securities issued with respect thereto), the
escrowed certificates for such forfeited Restricted Shares (as well
as all other assets and securities issued with respect thereto)
shall be surrendered to the Company for cancellation. To facilitate
the performance or observance by Employee of this Section 10(b)(3),
Employee hereby irrevocably appoints (which appointment is coupled
with an interest) the Company as the attorney-in-fact of Employee to
transfer any Restricted Shares (as well as other assets and
securities issued with respect thereto) so forfeited to the Company,
and Employee agrees that the transfer of stock certificates (as well
as all other assets and securities issued with respect thereto) with
respect to forfeited Restricted Shares shall be specifically
performable by the Company in a court of equity or law.
11. Section 83(b) Election. Employee understands that under Section 83 of
the Internal Revenue Code of 1986, as amended (the "Code"), the difference
between the Purchase Price, if any, paid for the Restricted Shares and their
fair market value on the date any forfeiture restrictions applicable to such
Restricted Shares lapse will be reportable as ordinary income at that time.
Employee understands that Employee may elect to be taxed at the time the
Restricted Shares are acquired hereunder to the extent the fair market value of
the Restricted Shares differs from the Purchase Price, if any, rather than when
and as such Restricted Shares cease to be subject to such forfeiture
restrictions, by filing an election under Section 83(b) of the Code with the
I.R.S. within thirty (30) days after the Date of Grant. If the fair market value
of the Restricted Shares at the Date of Grant equals the Purchase Price paid
(and thus no tax is payable), the election must be made to avoid adverse tax
consequences in the future. The form for making this election is attached as
Exhibit B hereto. Employee understands that failure to make this filing within
the 30-day period will result in the recognition of ordinary income by Employee
(in the event the fair market value of the Restricted Shares increases after the
date of purchase) as the forfeiture restrictions lapse. EMPLOYEE ACKNOWLEDGES
THAT IT IS EMPLOYEE'S SOLE RESPONSIBILITY, AND NOT THE COMPANY'S, TO FILE A
TIMELY ELECTION UNDER SECTION 83(b), EVEN IF EMPLOYEE REQUESTS THE COMPANY OR
ITS REPRESENTATIVES TO MAKE THIS FILING ON EMPLOYEE'S BEHALF. EMPLOYEE IS
RELYING SOLELY ON EMPLOYEE'S ADVISORS WITH RESPECT TO THE DECISION AS TO WHETHER
OR NOT TO FILE AN 83(b) ELECTION.
12. Miscellaneous Provisions.
(a) Employee Undertaking. Employee hereby agrees to take whatever
additional action and execute whatever additional documents the Company
may in its judgment deem necessary or advisable in order to carry out or
effect one or more of the obligations or restrictions, including, without
limitation, those set forth in Section 4 and Section 10(b)(3), imposed on
either Employee or the Restricted Shares pursuant to the express
provisions of the Plan and this Agreement.
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(b) Adjustment of Restricted Shares. The Restricted Shares subject
to this Agreement and the vesting provisions applicable thereto will be
adjusted from time to time, as determined by the Company, pursuant to
Articles 13, 14 and 15 of the Plan.
(c) Assignment. The rights and benefits of the Company under this
Agreement shall be transferable to any one or more persons or entities.
Except as provided in Section 6, the rights and obligations of Employee
hereunder may only be assigned with the prior written consent of the
Company. This Agreement shall be binding upon and inure to the benefit of
the permitted transferees, heirs, executors, administrators, and
successors of the parties hereto.
(d) No Waiver. No waiver of any breach or condition of this
Agreement shall be deemed to be a waiver of any other or subsequent breach
or condition, whether of like or different nature.
(e) Entire Agreement. The Plan and this Agreement constitute the
entire contract between the parties hereto with regard to the subject
matter hereof.
(f) Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original, but all of which together
shall constitute one and the same instrument.
(g) Lapse of this Agreement. This Agreement shall be null and void
in the event Employee shall fail to sign and return a counterpart hereof
to the Company within thirty (30) days of its delivery to Employee.
(h) No Contract for Employment. This Agreement does not constitute a
contract for employment and shall not affect the right of the Company to
terminate Employee's employment for any reason whatsoever.
(i) Construction. The Company shall have authority to make
reasonable constructions of this Agreement and to correct any defect or
supply any omission or reconcile any inconsistency in this Agreement, and
to prescribe reasonable rules and regulations relating to the
administration of this Agreement.
(j) Severability. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and
effect without said provision, provided that no such severability shall be
effective if it materially changes the economic benefit of this Agreement
to any party.
(k) Notice. Any notice relating to this Agreement shall be given in
writing and shall be deemed effective upon personal delivery or upon
deposit in the United States mail, registered or certified, postage
prepaid and addressed to the Company at its main office at 690 E. Lamar
Boulevard, Suite No. 200, Arlington, Texas 76011 or to such other address
as may be hereafter specified by the Company, to the attention of the
Company's Assistant Secretary. All notices to Employee shall be delivered
to Employee at Employee's address specified below or to such other address
as may be hereafter specified by Employee.
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(l) Governing Instrument and Law. This Agreement and any Restricted
Shares issued hereunder shall in all respects be governed by the terms and
provisions of the Plan, which terms and provisions are hereby incorporated
herein by reference, and by the laws of the State of Texas, and in the
event of a conflict between the terms of this Agreement and the terms of
the Plan (copy attached), the terms of the Plan shall control.
TANDY BRANDS ACCESSORIES, INC.
By: _____________________________________
J.S.B. Jenkins
President and Chief Executive Officer
Agreed and Accepted:
EMPLOYEE(1)
_________________________________________
_________________________________________
Address:_________________________________
___________________________________
___________________________________
- ------------
(1) I have received, completed, executed and retained the I.R.C. Section 83(b)
election that was attached hereto as Exhibit B. As set forth in Section 11
above, I understand that I, and not the Company, will be responsible for
completing the form and filing the election with the appropriate office of the
federal and state tax authorities and that if such filing is not completed
within thirty (30) days after the date of this Agreement, I will forfeit the
significant tax benefits of Section 83(b). I understand further that such filing
should be made by registered or certified mail, return receipt requested, and
that I must retain two (2) copies of the completed form for filing with my state
and federal tax returns for the current tax year and an additional copy for my
records.
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EXHIBIT A
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED _____________________________ hereby sells, assigns and
transfers unto TANDY BRANDS ACCESSORIES, INC., a Delaware corporation (the
"Company"), ______________________ (_________) shares of the common stock of the
Company standing in the name of _________________ on the books of the Company
represented by Certificate No. __________ herewith and does hereby irrevocably
constitute and appoint the Assistant Secretary of the Company Attorney-in-Fact
to transfer the said stock on the books of the within named Company with full
power of substitution and resubstitution in the premises.
Dated:______________
_________________________________ _______________________________
(Signature) (Signature of Spouse, if any)
_________________________________ _______________________________
(Print Name) (Print Name)
EXHIBIT B
FORM OF 83(B) ELECTION
The undersigned taxpayer hereby elects, pursuant to Section 83(b) of the
Internal Revenue Code of 1986, as amended, to include in his or her gross income
for the current taxable year, the amount of any compensation taxable to him or
her in connection with his or her receipt of the property described below:
(1) The name, address, taxpayer identification number and taxable year of
the undersigned are as follows:
Name of Taxpayer: _________________________________
Spouse: _________________________________
Address of Taxpayer: _________________________________
Taxpayer ID No.: _________________________________
Spouse's ID No.: _________________________________
Taxable Year: Calendar Year ___________________
(2) The property with respect to which the election is being made is
__________ shares of the common stock of Tandy Brands Accessories, Inc., a
Delaware corporation (the "Company").
(3) The property was issued on ____________, ___________.
(4) The property is subject to forfeiture if for any reason the
undersigned taxpayer's provision of services to the Company is terminated. The
forfeiture restrictions lapse on _________________,____________ .
(5) The fair market value at the time of transfer (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 the Company for whom the
undersigned taxpayer rendered the service underlying the transfer of property.
(8) This statement is executed as of: ____________________, __________.
Taxpayer Spouse of Taxpayer (if any)
________________________ _________________________
(Signature) (Signature)
________________________ _________________________
(Print Name) (Print Name)
CONSENT OF SPOUSE
I, ________________, spouse of ___________________ ("Employee"), have read
and approve the foregoing Agreement. In consideration of granting to Employee,
____________ shares of the common stock of Tandy Brands Accessories, Inc. as set
forth in the Agreement, I hereby appoint Employee as my attorney-in-fact in
respect to the exercise of any rights under the Agreement and agree to be bound
by the provisions of the Agreement insofar as I may have any rights in said
Agreement or any shares issued pursuant thereto under the community property
laws of the State of Texas or similar laws relating to marital property in
effect in the state of our residence as of the date of the signing of the
foregoing Agreement.
Dated: _________________, ____________.
Spouse of Employee
_________________________________
(Signature)
_________________________________
(Print Name)