RESTRICTED STOCK
AGREEMENT
THIS
RESTRICTED STOCK AGREEMENT (this “Agreement”) dated as
of January 29, 2009, by and between Frederick’s of
Hollywood Group Inc., a New York corporation (the
“Company”), and Thomas Lynch (the
“Employee”).
WHEREAS,
on January 29, 2009, pursuant to the terms and conditions of
the Company’s 2000 Performance Equity Plan (the
“Plan”), the Board of Directors of the Company (the
“Board”) authorized the issuance to the Employee,
effective on the date hereof, of 100,000 shares of the authorized
but unissued common stock of the Company, $.01 par value
(“Shares”), conditioned upon the Employee’s
acceptance thereof upon the terms and conditions set forth in this
Agreement and subject to the terms of the Plan; and
WHEREAS,
the Employee desires to acquire the Shares on the terms and
conditions set forth in this Agreement and subject to the terms of
the Plan;
1.1
The Company hereby issues to the Employee 100,000 Shares on the
terms and conditions set forth herein. Subject to Section 3
below, the Shares shall be subject to forfeiture in the event of
(a) the termination of Employee’s employment or
(b) if Employee does not purchase a minimum of 250,000 shares
of the Company’s common stock in the open market for his own
account under a Rule 10b5-1 trading plan to be entered into during
the first open window period during which Employee is able to enter
into a 10b5-1 trading plan in accordance with the terms of the
Company’s Insider Trading Policy (the “Stock
Purchase”) prior to the following dates: (i) prior to
January 2, 2010, all 100,000 shares shall be subject to
forfeiture even if the Stock Purchase has been completed prior to
January 2, 2010, (ii) on or after January 2, 2010
and prior to January 2, 2011, 50,000 shares shall be subject
to forfeiture only if the Stock Purchase has been completed prior
to January 2, 2010; if the Stock Purchase has not been
completed prior to such date, then all 100,000 shares shall be
subject to forfeiture and (iii) on or
after
January 2, 2011, no shares shall be subject to forfeiture only
if the Stock Purchase has been completed prior to January 2,
2011; if the Stock Purchase has not been completed prior to such
date, then all 100,000 shares shall be subject to forfeiture (each
a “Restriction Period” with respect to the applicable
number of Shares). The Shares shall be represented by two stock
certificates registered in the name of the Employee, each
representing 50,000 Shares. Both certificates (“Share
Certificates”) shall bear the legends set forth in
Sections 6(vi) and 6(vii) of this Agreement. The Share
Certificates shall be deposited with the Company, together with
stock powers endorsed in blank by the Employee and signature
Medallion Guaranteed, which will permit transfer to the Company of
the Shares represented by each such Share Certificate that is
forfeited or shall not become vested in accordance with the terms
of this Agreement and the Plan.
1.2
After issuance, the Shares shall constitute issued and outstanding
shares of common stock of the Company for all corporate purposes,
and the Employee shall have the right to vote such Shares, to
receive and retain all cash dividends as the Board may, in its sole
discretion, pay on such Shares, and to exercise all of the rights,
powers and privileges of a holder of common stock with respect to
such Shares, except that (a) the Employee shall not be
entitled to delivery of a Share Certificate until the Shares
represented by such Share Certificate vest in accordance with
Section 1.3 below and (b) other than cash dividends as
the Board, in its sole discretion, distributes, the Company will
retain custody of all distributions (“Retained
Distributions”) made or declared with respect to the Shares
(and such Retained Distributions will be subject to the same
restrictions, terms and conditions as applicable to the Shares)
until such time, if ever, as the Shares with respect to which such
Retained Distributions shall have been distributed have become
vested.
1.3
If the Employee is still an employee of the Company at the end of a
Restriction Period and the Stock Purchase has been completed during
the applicable Restriction Period as set forth in Section 1.1,
all of the Shares that are no longer subject to forfeiture, and the
Retained Distributions with respect thereto, shall vest and shall
no longer be subject to forfeiture by the Employee. After the date
that any Shares become vested, the Company shall instruct its
transfer agent to issue and deliver to the Employee a new
certificate for the Shares, which certificate shall not bear the
legend set forth in Section 6(vii). If, at any time prior to
the vesting
2
of any Shares
in accordance with the first sentence of this Section 1.3, the
Employee’s employment with the Company is terminated for any
reason, subject to the provisions of Section 3, or the Stock
Purchase has not been completed in accordance with
Section 1.1, then the Shares that have not then vested (and
the Retained Distributions with respect thereto) shall be forfeited
to the Company and the Employee shall not thereafter have any
rights with respect to such Shares. In such event, the Company is
authorized by the Employee to complete the stock powers to transfer
the Shares to the Company and deliver the Share Certificates and
stock powers to the Company’s transfer agent to return the
Shares to the status of authorized but unissued shares of common
stock.
1.4
“Employment” . The Employee shall be considered
to be employed by the Company pursuant to this Section 1 if
the Employment Agreement dated as of January 29, 2009 between
the Company and the Employee, as it may be amended from time to
time (“Employment Agreement”), has not been
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