EXHIBIT 10.15
RESTRICTED STOCK AWARD AGREEMENT
September 2, 2003
The parties to this Restricted Stock Award Agreement (this
"Agreement") are Education Management Corporation (the "Company") and J. William
Brooks (the "Executive").
WITNESSETH:
WHEREAS, the Company has adopted the Education Management Corporation
1996 Stock Incentive Plan, as amended (the "Plan"), for the benefit of eligible
employees of the Company and its Subsidiaries; and
WHEREAS, the Company and the Executive have entered into an Employment
Agreement, dated June 12, 2003 (the "Employment Agreement"), providing, in part,
for the grant of shares of the Company's Common Stock to the Executive subject
to certain transfer and forfeiture restrictions set forth in this Agreement, as
well as the provisions of the Plan, which shall lapse upon the third anniversary
of the date of this Agreement (the "Date of Grant");
NOW, THEREFORE, the parties, intending to be legally bound, agree as
follows:
1. RESTRICTED SHARES
1.1 Grant of Restricted Shares.
(a) As of the Date of Grant, the Company grants to the Executive
50,000 shares of Common Stock (the "Restricted Shares"), subject to the
restrictions set forth in Paragraph 1.2 of this Agreement, the terms and
conditions of the Plan and the other terms and conditions contained in this
Agreement. If and when the restrictions set forth in Paragraph 1.2 expire in
accordance with the terms of this Agreement without forfeiture of the Restricted
Shares, and upon the satisfaction of all other applicable conditions as to the
Restricted Shares, such shares shall no longer be considered Restricted Shares
for purposes of this Agreement.
(b) As soon as practicable after the Date of Grant, the Company shall
direct that a stock certificate or certificates representing the applicable
Restricted Shares be registered in the name of and issued to the Executive. Such
certificate or certificates shall be held in the custody of the Company or its
designee until the expiration of the applicable Restricted Period (as defined in
Paragraph 1.3). On or before the date of execution of this Agreement, the
Executive has delivered to the Company one or more stock powers endorsed in
blank relating to the Restricted Shares.
(c) Each certificate for the Restricted Shares shall bear the
following legend (the "Legend"):
The ownership and transferability of this certificate and the shares
of stock represented hereby are subject to the terms and conditions
(including forfeiture) of the Education Management Corporation 1996
Stock Incentive Plan and a Restricted Stock Award Agreement entered
into between the registered owner and Education Management
Corporation. Copies of such Plan and Agreement are on file in the
executive offices of Education Management Corporation.
In addition, the stock certificate or certificates for the Restricted Shares
shall be subject to such stop-transfer orders and other restrictions as the
Company may deem advisable under the rules, regulations, and other requirements
of the Securities and Exchange Commission, any stock exchange upon which the
Common Stock is then listed, and any applicable federal or state securities law,
and the Company may cause a legend or legends to be placed on such certificate
or certificates to make appropriate reference to such restrictions.
(d) As soon as administratively practicable following the expiration
of the Restricted Period without a forfeiture of the Restricted Shares, and upon
the satisfaction of all other applicable conditions as to the Restricted Shares,
including, but not limited to, the payment by the Executive of all applicable
withholding taxes, the Company shall deliver or cause to be delivered to the
Executive a certificate or certificates for the applicable Restricted Shares
which shall not bear the Legend.
1.2 Restrictions.
(a) The Executive shall have all rights and privileges of a
stockholder as to the Restricted Shares, including the right to vote and receive
dividends or other distributions with respect to the Restricted Shares, except
that the following restrictions shall apply:
(i) the Executive shall not be entitled to delivery of the
certificate or certificates for the Restricted Shares until the
expiration of the Restricted Period without a forfeiture of the
Restricted Shares and upon the satisfaction of all other applicable
conditions;
(ii) none of the Restricted Shares may be sold, transferred,
assigned, pledged or otherwise encumbered or disposed of during the
Restricted Period, except as provided in Section 7.01(c) of the Plan
or as otherwise permitted by the Committee in its sole discretion or
pursuant to rules adopted by the Committee in accordance with the
Plan; provided, however, the Executive shall be permitted, upon
request to the Committee, to sell or otherwise dispose of a sufficient
number of Restricted Shares which have vested in accordance with the
schedule in Paragraph 1.3(b) as may be reasonably necessary to satisfy
any applicable tax
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liability of the Executive (including federal, state or local taxes,
estimated tax payments or required tax withholding) related to the
vesting of such Restricted Shares during the Restricted Period;
(iii) all shares of Common Stock distributed as a dividend or
distribution, if any, with respect to the Restricted Shares prior to
the expiration of the Restricted Period shall be delivered to and held
by the Company and subject to the same restrictions as the Restricted
Shares until the termination of the Restricted Period; and
(iv) all of the Restricted Shares shall be forfeited and returned
to the Company and all rights of the Executive with respect to the
Restricted Shares shall terminate in their entirety on the terms and
conditions set forth in Paragraph 1.4.
(b) Any attempt to dispose of Restricted Shares or any interest in the
Restricted Shares in a manner contrary to the restrictions set forth in this
Agreement shall be void and of no effect.
1.3 Restricted Period and Vesting.
(a) Subject to the provisions contained in Paragraphs 1.4, 1.5 and
1.6, the restrictions set forth in Paragraph 1.2 shall apply for a period (the
"Restricted Period") beginning on the Date of Grant and ending on the third
anniversary of the Date of Grant.
(b) Notwithstanding the provisions of Paragraph 1.3(a), the Restricted
Shares shall be deemed vested and no longer subject to forfeiture under
Paragraph 1.4 (but still subject to the restrictions set forth in Paragraph 1.2)
in accordance with the following schedule:
Vesting Date Vested Percentage
- ----------------- -----------------
September 2, 2004 33%
September 2, 2005 66%
September 2, 2006 100%
1.4 Forfeiture.
(a) Subject to Paragraph 1.6 below, if during the Restricted Period
(i) the Executive's employment with the Company and its Subsidiaries is
terminated for any reason, other than (A) by the Company without Cause (as
defined in the Executive's Employment Agreement) or (B) by the Executive with
Good Reason (as defined in the Executive's Employment Agreement), (ii) there
occurs a material breach of this Agreement by the Executive or (iii) the
Executive fails to meet the tax withholding obligations described in Paragraph
1.5(b), all rights of the Executive to the Restricted Shares that have not
vested in accordance with Paragraph 1.3(b) as of the date of such termination
shall terminate immediately and be forfeited in their entirety.
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(b) Subject to Paragraph 1.6 below, if during the Restricted Period
the Executive's employment with the Company and its Subsidiaries is terminated
(i) by the Company without Cause or (ii) by the Executive with Good Reason, the
Executive shall not forfeit any of the Restricted Shares, whether vested or
unvested, and such Restricted Shares shall continue to vest in accordance with
the schedule in Paragraph 1.3(b) during the twelve-month period following the
Executive's date of termination; provided, upon expiration of the twelve-month
period following the Executive's date of termination, all rights of the
Executive to the Restricted Shares that have not vested in accordance with
Paragraph 1.3(b) as of that anniversary date shall terminate immediately and be
forfeited in their entirety.
(c) Notwithstanding Paragraph 1.4(b), if during the Restricted Period
the Executive's employment with the Company and its Subsidiaries is terminated
in anticipation of or within the two (2) year period following the occurrence of
a Change in Control (as defined in the Executive's Employment Agreement) (i) by
the Company without Cause or (ii) by the Executive with Good Reason, the vesting
of the Restricted Shares shall accelerate in full and the Executive shall be
deemed 100% vested in the Restricted Shares as of the date of the termination.
(d) In the event of any forfeiture under this Paragraph 1.4, the
certificate or certificates representing the forfeited Restricted Shares shall
be canceled to the extent of any Restricted Shares that were forfeited.
1.5 Withholding.
(a) The Committee shall determine the amount of any withholding or
other tax required by law to be withheld or paid by the Company with respect to
any income recognized by the Executive with respect to the Restricted Shares.
(b) The Executive shall be required to meet any applicable tax
withholding obligation in accordance with the provisions of Section 10.05 of the
Plan.
(d) The Committee shall be authorized, in its sole discretion, to
establish such rules and procedures relating to the use of shares of Common
Stock to satisfy tax withholding obligations as it deems necessary or
appropriate to facilitate and promote the conformity of the Executive's
transactions under the Plan and this Agreement with Rule 16b-3 under the
Securities Exchange Act of 1934, as amended, if such Rule is applicable to
transactions by the Executive.
1.6 Committee's Discretion. Notwithstanding any provision of this Agreement
to the contrary, the Committee shall have discretion under Section 7.02(b) of
the Plan to waive any forfeiture of the Restricted Shares as set forth in
Paragraph 1.4, the Restricted Period and any other conditions set forth in this
Agreement.
1.7 Defined Terms. Capitalized terms used but not defined in this Agreement
shall have the meanings set forth in the Plan, unless this Agreement
specifically provides that such term is defined in the Executive's Employment
Agreement. Any terms used in this Agreement,
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but defined in the Executive's Employment Agreement are incorporated herein by
reference and shall be effective for purposes of this Agreement without regard
to the continued effectiveness of the Employment Agreement.
2. REPRESENTATIONS OF THE EXECUTIVE
The Executive hereby represents to the Company that the Executive has read
and fully understands the provisions of this Agreement and the Plan and his or
her decision to participate in the Plan is completely voluntary. Further, the
Executive acknowledges that the Executive is relying solely on his or her own
advisors with respect to the tax consequences of this restricted stock award.
3. NOTICES
All notices or communications under this Agreement shall be in writing,
addressed as follows:
To the Company:
Education Management Corporation
210 Sixth Avenue
Pittsburgh, PA 15222
Attention: Frederick W. Steinberg, Esq.
To the Executive:
J. William Brooks
c/o American Education Centers
309 Buttermilk Pike
Fort Mitchell, Kentucky 41017
Any such notice or communication shall be (a) delivered by hand (with written
confirmation of receipt) or sent by a nationally recognized overnight delivery
service (receipt requested) or (b) be sent certified or registered mail, return
receipt requested, postage prepaid, addressed as above (or to such other address
as such party may designate in writing from time to time), and the actual date
of receipt shall determine the time at which notice was given.
4. ASSIGNMENT; BINDING AGREEMENT
This Agreement shall be binding upon and inure to the benefit of the heirs
and representatives of the Executive and the assigns and successors of the
Company, but neither this Agreement nor any rights hereunder shall be assignable
or otherwise subject to hypothecation by the Executive.
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5. ENTIRE AGREEMENT; AMENDMENT; TERMINATION
This Agreement represents the entire agreement of the parties with respect
to the subject matter hereof. The provisions of the Plan are incorporated in
this Agreement in their entirety. In the event of any conflict between the
provisions of this Agreement and the Plan, the provisions of the Plan shall
control. The Agreement may be amended at any time by written agreement of the
parties hereto.
6. GOVERNING LAW
This Agreement and its validity, interpretation, performance and
enforcement shall be governed by the laws of the Commonwealth of Pennsylvania
other than the conflict of laws provisions of such laws.
7. SEVERABILITY
Whenever possible, each provision in this Agreement shall be interpreted in
such manner as to be effective and valid under applicable law, but if any
provision of this Agreement shall be held to be prohibited by or invalid under
applicable law, then (a) such provision shall be deemed amended to accomplish
the objectives of the provision as originally written to the fullest extent
permitted by law and (b) all other provisions of this Agreement shall remain in
full force and effect.
8. NO RIGHT TO CONTINUED EMPLOYMENT OR PARTICIPATION; EFFECT ON OTHER PLANS
This Agreement shall not confer upon the Executive any right with respect
to continued employment by the Company or its Subsidiaries or continued
participation under the Plan, nor shall it interfere in any way with the right
of the Company and its Subsidiaries to terminate the Executive's employment at
any time. Payments received by the Executive pursuant to this Agreement shall
not be included in the determination of benefits under any pension, group
insurance or other benefit plan of the Company or any Subsidiaries in which the
Executive may be enrolled or for which the Executive may become eligible, except
as may be provided under the terms of such plans or determined by the Board.
9. NO STRICT CONSTRUCTION
No rule of strict construction shall be implied against the Company, the
Committee or any other person in the interpretation of any of the terms of the
Plan, this Agreement or any rule or procedure established by the Committee.
10. USE OF THE WORD "EXECUTIVE"
Wherever the word "Executive" is used in any provision of this Agreement
under circumstances where the provision should logically be construed to apply
to the executors, the
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administrators, or the person or persons to whom the Restricted Shares may be
transferred by will or the laws of descent and distribution, the word
"Executive" shall be deemed to include such person or persons.
11. FURTHER ASSURANCES
The Executive agrees, upon demand of the Company or the Committee, to do
all acts and execute, deliver and perform all additional documents, instruments
and agreements (including, without limitation, stock powers with respect to
shares of Common Stock issued as a dividend or distribution on Restricted
Shares) which may be reasonably required by the Company or the Committee, as the
case may be, to implement the provisions and purposes of this Agreement and the
Plan.
IN WITNESS WHEREOF, the parties have duly executed this Agreement, as of
the day and year first above written.
EDUCATION MANAGEMENT CORPORATION
By: /s/ RONALD W. OGREDNIK
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Title: Senior Vice President, Human Resources
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EXECUTIVE
/s/ J. WILLIAM BROOKS
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J. WILLIAM BROOKS
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