Exhibit 10.2

 

ADVANCE AMERICA, CASH ADVANCE CENTERS, INC.
RESTRICTED STOCK AGREEMENT

 

This RESTRICTED STOCK AGREEMENT (this “Restricted Stock Agreement”) is made and
entered into as of October 27, 2005 (the “Date of Grant”), by and between
Advance America, Cash Advance Centers, Inc., a Delaware corporation (the
“Company”) and Kenneth E. Compton (the “Recipient”).

 

WHEREAS, the Board of Directors of the Company (the “Board”) has approved the
Award to the Recipient as set forth below; and

 

WHEREAS, the Award is intended to induce the Recipient to join the Company as
its Chief Executive Officer and President, to motivate him to achieve long-term
Company goals, and to further align his interests with those of the Company’s
stockholders.

 

NOW, THEREFORE, in consideration of the covenants and agreements herein
contained, and intending to be legally bound hereby, the parties agree as
follows:

 

1.  Definitions.

 

“Award” shall mean the shares of Restricted Stock granted pursuant to the terms
of this Restricted Stock Agreement.

 

“Bylaws” shall mean the Amended and Restated Bylaws of the Company, as they may
be further amended, modified, or restated from time to time.

 

“Certificate of Incorporation” shall mean the Amended and Restated Certificate
of Incorporation of the Company as it may be further amended, modified, or
restated from time to time.

 

“Change in Control” shall mean a “change in ownership or effective control of a
corporation, or a change in the ownership of a substantial portion of the assets
of a corporation” as defined for purposes of section 409A of the Internal
Revenue Code of 1986, as amended, with respect to the Company.

 

“Committee” shall mean the Compensation Committee of the Board.

 

“Common Stock” shall mean the common stock of the Company, par value $.01 per
share.

 

2.  Grant of Restricted Stock.  The Company hereby grants to the Recipient
250,000 restricted shares of Common Stock (the “Restricted Stock”), subject to
all of the terms and conditions of this Restricted Stock Agreement.  The
Recipient’s grant and record of share ownership shall be kept on the books of
the Company, until the restrictions on transfer have lapsed pursuant to
Section 3 below.  Shares that have become vested pursuant to Section 3 below may
be evidenced by stock certificates, at the request of the Recipient, which
certificates shall be

 

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registered in the name of the Recipient and delivered to Recipient within five
(5) days of such request, subject to Section 8 below.

 

3.  Lapse of Restrictions.  All shares of Restricted Stock shall be unvested
unless and until they become Vested Shares (defined below) in accordance with
this Section 3.  If the Recipient is employed by the Company or any Subsidiary
as of the applicable anniversary date set forth below, the Restricted Stock
shall become “Vested Shares” according to the percentage set forth opposite such
date:

 

Date

 

Cumulative Percentage Vested

 

First Anniversary of the Date of Grant

 

12

½%

 

Second Anniversary of the Date of Grant

 

25

%

 

Third Anniversary of the Date of Grant

 

37

½%

 

Fourth Anniversary of the Date of Grant

 

50

%

 

Fifth Anniversary of the Date of Grant

 

62

½%

 

Sixth Anniversary of the Date of Grant

 

75

%

 

Seventh Anniversary of the Date of Grant

 

87

½%

 

Eighth Anniversary of the Date of Grant

 

100

%

 

 

In the event that the Recipient is employed by the Company or one of its
subsidiaries upon a Change of Control, all Restricted Stock shall automatically
become Vested Shares upon the consummation of such Change in Control. 
Additionally, in the event that the employment of the Recipient with the Company
or its subsidiaries (or the Recipient’s service to the Company or its
subsidiaries) shall terminate on account of the death of the Recipient, all
Restricted Stock shall automatically become Vested Shares.

 

4.  Restrictions on Transfer.  Shares of Restricted Stock may not be
transferred, assigned, or otherwise disposed of by the Recipient prior to
becoming Vested Shares, including by way of sale, assignment, transfer, pledge,
or otherwise.  Except as otherwise provided in this Section 4, no transfer of
the Recipient’s rights with respect to such Restricted Stock, whether voluntary
or involuntary, by operation of law or otherwise, shall be permitted. 
Immediately upon any attempt to transfer such rights, such shares, and all of
the rights related thereto, shall be forfeited by the Recipient.  Upon the death
of the Recipient, the Recipient’s rights with respect to such Vested Shares may
be exercised only by the executor or administrator of the Recipient’s estate or
by a person who shall have acquired the right to such exercise by will or by the
laws of descent and distribution.  No transfer of shares of Vested Stock by will
or the laws of descent and distribution shall be effective to bind the Company
unless the Committee shall have been furnished with (i) written notice thereof
and with a copy of the will and/or such evidence as the Committee may deem
necessary to establish the validity of the transfer and (ii) an agreement by the
transferee to comply with all the terms and conditions of this Restricted Stock
Agreement that are or would have been applicable to the Recipient and to be
bound by the acknowledgments made by the Recipient in connection with the grant
of the Award.  The Recipient may file with the Committee a written designation
of a beneficiary on such form as may be prescribed by the Committee and may,
from time to time, amend or revoke such designation.  If no designated
beneficiary survives the Recipient, the executor or administrator of the
Recipient’s estate shall be deemed to be the Recipient’s beneficiary.

 

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5.  Rights as a Stockholder.  The Company shall hold in escrow all dividends, if
any, that are paid with respect to the shares of Restricted Stock until all
restrictions on such shares have lapsed.  Recipient agrees that the right to
vote any shares for which the restrictions on transfer set forth in Section 4
hereof have not yet lapsed pursuant to the vesting schedule set forth in
Section 3 hereof (the “Unvested Shares”) will be held by the Company and,
accordingly, shall execute an irrevocable proxy in favor of the Company for all
shares of Restricted Stock in the form supplied by the Company.

 

6.  Adjustment for Change in Capitalization.  In the event that any dividend or
other distribution is declared (whether in the form of cash, Common Stock, or
other property), or there occurs any recapitalization, stock split, reverse
stock split, reorganization, merger, consolidation, spin-off, combination,
repurchase, share exchange, or other similar corporate transaction or event, the
Committee shall adjust, in its sole and absolute discretion, the shares of
Restricted Stock, and any dividends, cash, property, or stock issuable in
respect of the Restricted Stock, proportionate to any such adjustments made with
respect to the Company’s outstanding Common Stock.

 

7.  Notices.  Any notice required or permitted under this Restricted Stock
Agreement shall be deemed given when delivered personally, or when deposited in
a United States Post Office, postage prepaid, addressed, as appropriate, to the
Recipient either at the Recipient’s address as last known by the Company or such
other address as the Recipient may designate in writing to the Company.

 

8.  Securities Laws Requirements.

 

(a)                                  Notwithstanding anything herein to the
contrary, the Company shall not be obligated to cause to be issued or delivered
any certificates evidencing shares of Common Stock pursuant to this Restricted
Stock Agreement unless and until the Company is advised by its counsel that the
issuance and delivery of such certificates is in compliance with all applicable
laws, regulations of governmental authority, and the requirements of any
securities exchange on which shares of Common Stock are traded.  The Committee
may require, as a condition of the issuance and delivery of certificates
evidencing shares of Common Stock pursuant to the terms hereof, that the
recipient of such shares make such agreements and representations, and that such
certificates bear such legends, as the Committee, in its sole discretion, deems
necessary or advisable.

 

(b)                                 The Company shall not be obligated to
transfer any shares of Common Stock from the Recipient to another party, if such
transfer, in the opinion of counsel for the Company, would violate the
Securities Act of 1933, as amended from time to time (or any other federal or
state statutes having similar requirements as may be in effect at that time), or
the requirements of any securities exchange on which shares of Common Stock are
traded.  Further, the Company may require as a condition of transfer of any
shares to the Recipient that the Recipient furnish a written representation that
he or she is holding the shares for investment and not with a view to resale or
distribution to the public.  The Committee may, in its sole discretion, defer
the effectiveness of any issuance or transfer of shares of Common Stock
hereunder in order to allow the issuance of such shares to be made pursuant to
registration or an exemption from registration or other methods for compliance
available under federal or state securities laws.  The Committee

 

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shall inform the Recipient in writing of its decision to defer the effectiveness
of an issuance or transfer.

 

9.  Protections Against Violations of Restricted Stock Agreement.  No purported
sale, assignment, mortgage, hypothecation, transfer, pledge, encumbrance, gift,
transfer in trust (voting or other), or other disposition of, or creation of a
security interest in or lien on, any of the shares of Restricted Stock by any
holder thereof in violation of the provisions of this Restricted Stock Agreement
or the Certificate of Incorporation or the Bylaws, shall be valid, and the
Company will not transfer any of said shares of Restricted Stock on its books
nor will any of said shares of Restricted Stock be entitled to vote, nor will
any dividends be paid thereon, unless and until there has been full compliance
with said provisions to the satisfaction of the Company.  The foregoing
restrictions are in addition to and not in lieu of any other remedies, legal or
equitable, available to enforce said provisions.

 

10.  Taxes.  The Recipient understands that he or she (and not the Company)
shall be responsible for any tax obligation that may arise as a result of the
transactions contemplated by this Restricted Stock Agreement and shall pay to
the Company the amount determined by the Company to be such tax obligation at
the time such tax obligation arises.  If the Recipient fails to make such
payment, the number of shares necessary to satisfy the tax obligations shall be
forfeited.  The Recipient shall promptly notify the Company of any election made
pursuant to Section 83(b) of the Internal Revenue Code of 1986, as amended from
time to time (the “Code”).

 

THE RECIPIENT ACKNOWLEDGES THAT IT IS THE RECIPIENT’S SOLE RESPONSIBILITY AND
NOT THE COMPANY’S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b) OF THE CODE,
IN THE EVENT THAT THE RECIPIENT DESIRES TO MAKE THAT ELECTION.

 

11.  Legend.  The Company’s Secretary shall, or shall instruct the Company’s
transfer agent to, provide stop transfer instructions in the Company’s stock
records to prevent any transfer of the Restricted Stock for any purpose until
the shares become Vested Shares.  Any certificate that the Secretary or the
transfer agent deems necessary to issue to represent shares of Restricted Stock
shall, until all restrictions lapse and new certificates are issued, bear the
following legend:

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN VESTING
REQUIREMENTS AND MAY BE SUBJECT TO REACQUISITION BY THE COMPANY UNDER THE TERMS
OF THAT CERTAIN RESTRICTED STOCK AGREEMENT BY AND BETWEEN ADVANCE AMERICA, CASH
ADVANCE CENTERS, INC. (THE “COMPANY”) AND THE HOLDER OF THE SECURITIES.  PRIOR
TO VESTING OF OWNERSHIP IN THE SECURITIES, THEY MAY NOT BE, DIRECTLY OR
INDIRECTLY, OFFERED, TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED, OR
OTHERWISE DISPOSED OF UNDER ANY CIRCUMSTANCES.  COPIES OF THE ABOVE REFERENCED
AGREEMENT ARE ON FILE AT THE OFFICES OF THE COMPANY, 135 NORTH CHURCH STREET,
SPARTANBURG, SOUTH CAROLINA, 29306.

 

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12.  Failure to Enforce Not a Waiver.  The failure of the Company to enforce at
any time any provision of this Restricted Stock Agreement shall in no way be
construed to be a waiver of such provision or of any other provision hereof.

 

13.  Effect of Termination of Employment (or Provision of Services). 
Notwithstanding anything else herein to the contrary, upon the termination of
Recipient’s employment (or upon cessation of Recipient’s services to the Company
or any of its subsidiaries) for any reason, or no reason, any and all shares to
which restrictions on transferability apply and that have not become Vested
Shares shall be immediately forfeited by the Recipient and transferred to, and
reacquired by, the Company.  In the event that the Company requires a return of
shares, it shall also have the right to require the return of all dividends paid
on such shares, whether by termination of any escrow arrangement under which
such dividends are held or otherwise.

 

14.  Governing Law.  This Restricted Stock Agreement shall be governed by and
construed according to the laws of the State of Delaware without regard to its
principles of conflict of laws.

 

15.  Amendments.  Except as otherwise provided in Section 18 and Section 19,
this Restricted Stock Agreement may be amended or modified at any time only by
an instrument in writing signed by each of the parties hereto.

 

16.  Survival of Terms.  This Restricted Stock Agreement shall apply to and bind
the Recipient and the Company and their respective permitted assignees and
transferees, heirs, legatees, executors, administrators, and legal successors.

 

17.  Agreement Not a Contract for Services.  Neither the grant of Restricted
Stock, this Restricted Stock Agreement, nor any other action taken pursuant to
this Restricted Stock Agreement shall constitute or be evidence of any agreement
or understanding, express or implied, that the Recipient has a right to continue
to provide services as an officer, director, employee, or consultant of the
Company for any period of time or at any specific rate of compensation.

 

18.  Severability.  If a provision of this Restricted Stock Agreement is held
invalid by a court of competent jurisdiction, the remaining provisions will
nonetheless be enforceable according to their terms.  Further, if any provision
is held to be over broad as written, that provision shall be amended to narrow
its application to the extent necessary to make the provision enforceable
according to applicable law and enforced as amended.

 

19.  Authority Reserved to the Committee.  The Committee may, in its sole and
absolute discretion, without amendment to this Restricted Stock Agreement,
accelerate the vesting date, or waive any condition imposed hereunder, with
respect to any share of Restricted Stock.

 

20.  Counterparts.  This Restricted Stock Agreement may be executed in one or
more counterparts, each of which will be deemed to be an original copy of this
Restricted Stock Agreement and all of which, when taken together, will be deemed
to constitute one and the same agreement.

 

[Remainder of Page Intentionally Left Blank.]

 

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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Restricted Stock Agreement on the day and year first above written.

 

 

ADVANCE AMERICA, CASH ADVANCE CENTERS, INC.

 

 

 

 

 

By

 

/s/ John I. Hill

 

 

Name:

John I. Hill

 

Title:

Chief Financial Officer

 

 

 

 

 

 

 

RECIPIENT:

 

 

 

 

/s/ Kenneth E. Compton

 

 

Kenneth E. Compton

 

 

Restricted Stock Agreement

 

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IRREVOCABLE PROXY

 

I, the undersigned, hereby irrevocably authorize and empower Advance America,
Cash Advance Centers, Inc. (the “Company”) as my irrevocable proxy (the “Proxy”)
to represent me with respect of any and all Unvested Shares (as such term is
defined in the Restricted Stock Agreement dated as of October 27, 2005, by and
between the Company and the undersigned (the “Restricted Stock Agreement”)) at
any and all general meetings, or pursuant to any action by written consent, of
the stockholders of the Company.

 

The Proxy is irrevocably authorized and empowered to receive, in my stead, any
and all notices of and invitations to the Company’s general meetings, and to
participate in all such general meetings; and the Proxy is authorized and
empowered to vote all such Unvested Shares in such manner as the Proxy shall, in
the Proxy’s sole discretion, deem to be in the best interests of the Company.

 

This proxy shall remain in full force and effect until the shares of Restricted
Stock (as such term is defined in the Restricted Stock Agreement) granted to me
pursuant to the Restricted Stock Agreement have vested in accordance with the
terms of the Restricted Stock Agreement, unless sooner terminated by the
Company.

 

NAME:  Kenneth E. Compton

 

 

DATE:  October 27, 2005

 

SIGNATURE:

/s/ Kenneth E. Compton

 

 

 

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