Restricted Stock Agreement - Acclaim Entertainment Inc. and William G. Sorenson
RESTRICTED STOCK AGREEMENT
AGREEMENT, made and entered into this 18th day of August, 1999, by and
between ACCLAIM ENTERTAINMENT, INC., a Delaware corporation with its principal
offices at One Acclaim Plaza, Glen Cove, New York 11542-2708 (the "Company"),
and William G. Sorenson ("Sorenson"), an individual with an address at 530
Monterey Avenue, Pelham Manor, New York 10803.
W I T N E S S E T H
WHEREAS, concurrently herewith, the Company and Sorenson are entering into
an agreement (the "Employment Agreement") relating to Sorenson's employment by
the Company;
WHEREAS, in connection with such employment, the Company has agreed to sell
100,000 shares of common stock, par value $0.02 per share (the "Common Stock"),
of the Company to Sorenson and Sorenson desires to purchase the same from the
Company.
NOW, THEREFORE, in consideration of the foregoing premises and of the mutual
covenants and agreements herein contained, the parties hereby agree as
follows:
1. The Company hereby sells to Sorenson, and Sorenson hereby purchases from
the Company, 100,000 shares of Common Stock (the "Restricted Shares") at a
purchase price per share of $0.02 or a total purchase price of $2,000. Payment
for the Restricted Shares shall be made by Sorenson to the Company
simultaneously with the execution and delivery of this Agreement.
2. Except as other-wise specifically provided in this Agreement, Sorenson
shall not sell, assign, transfer or otherwise dispose of, and shall not pledge
or hypothecate, any or all of the Restricted Shares.
3. The restrictions set forth in Section 2 hereof (the "Stock
Restrictions") shall terminate as follows:
(a) as to 33,333 of the Restricted Shares owned by Sorenson, on the
first anniversary of the date of this Agreement;
(b) as to an additional 33,333 of the Restricted Shares owned by
Sorenson, on the second anniversary of the date of this
Agreement; and
(c) as to the remaining 33,334 of the Restricted Shares owned by
Sorenson, on the third anniversary of the date of this Agreement.
4. Notwithstanding the provisions of Section 3 hereof, if Sorenson's
service with the Company shall be terminated pursuant to the first sentence of
Paragraph 8A of the Employment Agreement prior to the termination, in whole or
in part, of the Stock Restrictions with respect to
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his Restricted Shares, then, the Stock Restrictions which shall not have
theretofore terminated with respect to such Restricted Shares shall forthwith
terminate.
5. In the event Sorenson's service with the Company and its Subsidiaries
shall terminate prior to the complete termination of the Stock Restrictions,
then, except as otherwise provided in Section 4 hereof, the Stock
Restrictions shall no longer terminate with respect to any Restricted Shares and
Sorenson shall be obligated immediately to redeliver to the Company those
Restricted Shares as to which the Stock Restrictions shall not have terminated
and, as full consideration for such shares, the Company shall pay to Sorenson an
amount equal to the purchase price per share paid by Sorenson for such
Restricted Shares irrespective of the market value of such shares at the time of
redelivery.
6. The Company shall cause each certificate for Restricted Shares to be
issued in Sorenson's name and such shares shall be fully paid and nonassessable
and free from preemptive rights. Each such certificate shall bear (i) a legend
to the effect that the transferability of each such Restricted Share is
restricted in accordance with the provisions of this Agreement and (ii) a legend
to the effect that the securities represented by such certificate have not been
registered under the Securities Act of 1933 (the "Securities Act") and that they
may not be sold or transferred except in compliance with the registration
requirements of the Securities Act or an exemption therefrom.
7. Sorenson represents and warrants to the Company that the Restricted
Shares are being acquired by him solely for his own account and not with a view
to, or for sale in connection with, the distribution thereof. Sorenson
acknowledges that the sale of the Restricted Shares hereunder have not been
registered under the Securities Act and, accordingly, that the Restricted Shares
may not be resold unless subsequently registered under the Securities Act or
unless an exemption from such registration is available.
8. Nothing herein contained shall be deemed to confer upon Sorenson any
right to continue in the employ of the Company, nor to interfere in any way with
the right of the Company to terminate Sorenson's employment at any time.
9. Sorenson (a) agrees that the Restricted Shares shall be subject to, and
shall be held by him in accordance with, this Agreement, (b) agrees that the
Company may place on the certificates representing the Restricted Shares or new
or additional or different shares or securities distributed with respect to the
Restricted Shares such legend or legends as the Company may deem appropriate and
that the Company may place a stop transfer order with respect to such Restricted
Shares with the transfer agent(s) for the Common Stock and (c) at his option,
(i) shall be entitled to make the election permitted under section 83(b) of
the Internal Revenue Code of 1986, as amended (the "Code"), to include in gross
income in the taxable year in which the Restricted Shares are transferred to
him, the fair market value of such shares at the time of transfer,
notwithstanding that such shares are subject to a substantial risk of forfeiture
within the meaning of the Code, or (ii) may elect to include in gross income the
fair market value of the Restricted Shares as of the date on which such
restriction lapses.
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10. If the Restricted Shares should, as a result of a stock split or stock
dividend or combination of shares or any other change, or exchange for other
securities, by reclassification, reorganization, merger, consolidation,
recapitalization or otherwise, be increased or decreased or changed into or
exchanged for a different number or kind of shares of stock or other securities
of the Company or of another corporation, all provisions of this Agreement
relating to restrictions and lapse of restrictions shall thereupon be deemed
applicable to such new or additional or different shares or securities to the
same extent applicable to the Restricted Shares with respect to which they were
distributed.
11. (a) Sorenson shall make such arrangements with the Company with respect
to income tax withholding as the Company shall determine in its sole discretion
is appropriate to ensure payment of federal, state or local income taxes due
with respect to the issuance and/or ownership of Restricted Shares and the
release of the Stock Restrictions thereon.
(b) Unless Sorenson shall make an election under section 83(b) of
the Code with respect thereto, Sorenson may, in the discretion of the Company
and subject to such rules as the Company may adopt, elect to satisfy his
withholding obligation arising as a result of the release of the Stock
Restrictions with respect to any Restricted Shares, in whole or in part, by
electing (an "Election") to deliver to the Company shares of Common Stock (other
than Restricted Shares as to which the Stock Restrictions shall not have
theretofore terminated) having a fair market value, determined as of the date
that the amount to be withheld is determined (the "Tax Date"), equal to the
amount required to be so withheld. Sorenson shall pay the Company in cash for
any fractional share that would otherwise be required to be delivered.
12. This Agreement, together with the Employment Agreement, embodies the
entire understanding between the Company and Sorenson and supersedes all prior
agreements and understandings relating to the matters covered hereby. No
provision of this Agreement may be changed or waived except by a signed written
agreement between the Company and Sorenson. Neither this Agreement nor any of
Sorenson's rights or duties hereunder shall be assignable by Sorenson without
the prior written consent of the Company.
13. Any notices required to be given hereunder shall be sent by first class
registered mail, postage and registry fees prepaid, and addressed to the Company
and Sorenson at their respective addresses set forth above or to such other
address as shall be indicated by the Company or Sorenson in writing to the
other. Any such notice shall be deemed given three (3) days after it is mailed
as aforesaid or upon personal delivery.
14. This Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the State of New York applicable to agreements
wholly to be executed and to be performed therein. If any one or more of the
provisions of this Agreement shall be held to be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
15. Any dispute, claim, controversy or claim arising out of, relating to or
in connection with this Agreement, or the breach, termination or validity
thereof, shall be brought exclusively in any Federal or State court in the State
of New York, County of New York. Both
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15. Any dispute, claim, controversy or claim arising out of, relating to or
in connection with this Agreement, or the breach, termination or validity
thereof, shall be brought exclusively in any Federal or State court in the State
of New York, County of New York. Both parties hereto expressly and irrevocably
submit to the jurisdiction of said courts and irrevocably waive any objection
which either of them may now or hereafter have to the laying of venue of any
action, suit or proceeding arising out of or relating to this Agreement brought
in such courts, irrevocably waive any claim that any such action, suit or
proceeding brought in any such court has been brought in an inconvenient forum
and further irrevocably waive the right to object, with respect to such claim,
action, suit or proceeding brought in any such court, that such court does not
have jurisdiction over such party. The parties hereto hereby irrevocably consent
to the service of process by registered mail, postage prepaid, or by personal
service within or without the State of New York. Nothing contained herein shall
affect the right to serve process in any manner permitted by law.
IN WITNESS WHEREOF, the Company has caused this instrument to be executed by
a duly authorized officer and Sorenson has hereunto affixed his hand the day and
year first above written.
ACCLAIM ENTERTAINMENT, INC.
By: /s/ Gregory E. Fischbach
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Name: Gregory E. Fischbach
Title: President, Chief Executive Officer
and Co-Chairman
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William G. Sorenson
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15. Any dispute, claim, controversy or claim arising out of, relating to or
in connection with this Agreement, or the breach, termination or validity
thereof, shall be brought exclusively in any Federal or State court in the State
of New York, County of New York. Both parties hereto expressly and irrevocably
submit to the jurisdiction of said courts and irrevocably waive any objection
which either of them may now or hereafter have to the laying of venue of any
action, suit or proceeding arising out of or relating to this Agreement brought
in such courts, irrevocably waive any claim that any such action, suit or
proceeding brought in any such court has been brought in an inconvenient forum
and further irrevocably waive the right to object, with respect to such claim,
action, suit or proceeding brought in any such court, that such court does not
have jurisdiction over such party. The parties hereto hereby irrevocably consent
to the service of process by registered mail, postage prepaid, or by personal
service within or without the State of New York. Nothing contained herein shall
affect the right to serve process in any manner permitted by law.
IN WITNESS WHEREOF, the Company has caused this instrument to be executed by
a duly authorized officer and Sorenson has hereunto affixed his hand the day and
year first above written.
ACCLAIM Entertainment, INC.
By: --------------------------
/s/ William G. Sorenson
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William G. Sorenson