Exhibit 10.2

 

 

RESTRICTED STOCK AWARD AGREEMENT

 

This Restricted Stock Award Agreement (the "Agreement") made as of February 9,
2005 by and between Foot Locker, Inc., a New York corporation with its principal
office located at 112 West 34th Street, New York, New York 10120 (the "Company")
and Matthew D. Serra (the "Executive").

 

On January 25, 2005, the Stock Option Sub-Committee of the Compensation and
Management Resources Committee (the “Compensation Committee”) of the Board of
Directors of the Company approved the grant to the Executive effective as of
February 9, 2005 (the "Date of Grant") of an award of 105,000 shares of
Restricted Stock under the 2003 Stock Option and Award Plan (the "Plan"),
subject to the terms of the Plan and the restrictions set forth in this
Agreement.

 

1.

Grant of Shares

 

The Company is transferring to the Executive 105,000 shares of validly issued
Common Stock of the Company, par value $.01 per share (the “Restricted Stock”).
Such shares are fully paid and nonassessable and upon transfer shall be validly
issued and outstanding. The shares are subject to certain restrictions pursuant
to Section 3 hereof, which restrictions shall expire as provided in Section 3.3
hereof.

 

2.

Restrictions on Transfer

 

The Employee shall not sell, transfer, pledge, hypothecate, assign or otherwise
dispose of the Restricted Stock, except as set forth in this Agreement. Any
attempted sale, transfer, pledge, hypothecation, assignment or other disposition
of the shares in violation of this Agreement shall be void and of no effect and
the Company shall have the right to disregard the same on its books and records
and to issue "stop transfer" instructions to its transfer agent.

 

3.

Restricted Stock

 

3.1       Deposit of Certificates. The Executive will deposit with and deliver
to the Company the stock certificate or certificates representing the Restricted
Stock, each duly endorsed in blank or accompanied by stock powers duly executed
in blank. In the event the Executive receives a stock dividend on the Restricted
Stock or the Restricted Stock is split or the Executive receives any other
shares, securities, monies, or property representing a dividend on the
Restricted Stock (other than regular cash dividends on and after the date of
this Agreement) or representing a distribution or return of capital upon or in
respect of the Restricted Stock or any part thereof, or resulting from a
split-up,

 

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reclassification or other like changes of the Restricted Stock, or otherwise
received in exchange therefor, and any warrants, rights or options issued to the
Executive in respect of the Restricted Stock (collectively the "RS Property"),
the Executive will also immediately deposit with and deliver to the Company any
of such RS Property, including any certificates representing shares duly
endorsed in blank or accompanied by stock powers duly executed in blank, and
such RS Property shall be subject to the same restrictions, including that of
this Section 3.1, as the Restricted Stock with regard to which they are issued
and shall herein be encompassed within the term "Restricted Stock."

 

3.2       Rights with Regard to the Restricted Stock. The Restricted Stock has
been transferred from either the Company's treasury or newly issued stock and,
therefore, upon delivery to the Executive will constitute issued and outstanding
shares of Common Stock for all corporate purposes. From and after the date of
transfer, the Executive will have the right to vote the Restricted Stock, to
receive and retain all regular cash dividends payable to record holders of
Common Stock on and after the transfer of the Restricted Stock (although such
dividends shall be treated, to the extent required by law, as additional
compensation for tax purposes if paid on Restricted Stock), and to exercise all
other rights, powers and privileges of a holder of Common Stock with respect to
the Restricted Stock, with the exceptions that (i) the Executive will not be
entitled to delivery of the stock certificate or certificates representing the
Restricted Stock until the restriction period shall have expired and unless all
other vesting requirements with respect thereto shall have been fulfilled, (ii)
the Company will retain custody of the stock certificate or certificates
representing the Restricted Stock and the other RS Property during the
restriction period, (iii) no RS Property shall bear interest or be segregated in
separate accounts during the restriction period and (iv) the Executive may not
sell, assign, transfer, pledge, exchange, encumber or dispose of the Restricted
Stock during the restriction period.

 

3.3

Vesting.

 

Thirty-five thousand shares of Restricted Stock shall become vested and cease to
be Restricted Stock (but still subject to the other terms of the Plan and this
Agreement) on

March 15, 2006; 35,000 shares of Restricted Stock shall become vested and cease
to be Restricted Stock (but still subject to the other terms of the Plan and
this Agreement) on

March 15, 2007; and 35,000 shares of Restricted Stock shall become vested and
cease to be Restricted Stock (but still subject to the other terms of the Plan
and this Agreement) on

February 1, 2008 if the Executive has been continuously employed by the Company
or its subsidiaries within the meaning of Section 424 of the Internal Revenue
Code of 1986, as amended (the "Control Group") until such date.

 

Other than as may be provided for under Section 3.4 hereof, there shall be no
proportionate or partial vesting in the periods prior to the appropriate vesting
date and all vesting shall occur only on the appropriate vesting date.

 

 

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When any Restricted Stock becomes vested, the Company shall promptly issue and
deliver to the Executive a new stock certificate registered in the name of the
Executive for such shares without the legend set forth in Section 4 hereof and
deliver to the Executive any related other RS Property.

 

In addition, all shares of Restricted Stock shall become immediately vested and
cease to be Restricted Stock upon any Change in Control as defined in Appendix A
hereto.

 

3.4       Forfeiture. In the event of the Executive's death, disability, or
resignation, the Executive shall forfeit to the Company, without compensation,
all unvested shares of Restricted Stock; provided that (i) in the event of the
death or disability of the Executive, or (ii) in the event that the Executive
ceases to be employed by the Company or any subsidiary or affiliate of the
Company as a result of the closing, sale, spin-off or other divestiture of any
operation of the Company, the Compensation Committee, in its sole discretion,
may, but shall not be obligated to, fully vest and not forfeit all or any
portion of the Executive's Restricted Stock; and provided further that in the
event that the employment of the Executive by the Company is terminated in a
manner that gives rise to the payments provided for in Section 5(c) of the
Employment Agreement, the Restricted Stock shall become fully vested as of the
date of the termination of his employment.

 

3.5       Adjustments. In the event of any stock dividend, split up, split-off,
spin-off, distribution, recapitalization, combination or exchange of shares,
merger, consolidation, reorganization or liquidation or the like, the Restricted
Stock shall, where appropriate in the sole discretion of the Compensation
Committee, receive the same distributions as other shares of Common Stock or on
some other basis as determined by the Compensation Committee. In any such event,
the Compensation Committee may, in its sole discretion, determine to award
additional Restricted Stock in lieu of the distribution or adjustment being made
with respect to other shares of Common Stock. In any such event, the
determination made by the Compensation Committee of the Board of Directors shall
be conclusive. The Compensation Committee may, in its sole discretion, at any
time fully vest and not forfeit all or any portion of the Executive's Restricted
Stock.

 

3.6

Withholding. The Executive agrees that, subject to subsection 3.7 below,

 

(a)       No later than the date on which any Restricted Stock shall have become
vested, the Executive will pay to the Company, or make arrangements satisfactory
to the Company regarding payment of, any federal, state or local taxes of any
kind required by law to be withheld with respect to any Restricted Stock which
shall have become so vested; and

 

(b)       The Company shall, to the extent permitted by law, have the right to
deduct from any payment of any kind otherwise due to the Executive any federal,
state or local taxes of any kind required by law to be withheld with respect to
any Restricted Stock which shall have become so vested.

 

 

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3.7       Section 83(b). If the Executive properly elects (as required by
Section 83(b) of the Internal Revenue Code of 1986, as amended) within thirty
(30) days after the issuance of the Restricted Stock to include in gross income
for federal income tax purposes in the year of issuance the fair market value of
such Restricted Stock, the Executive shall pay to the Company or make
arrangements satisfactory to the Company to pay to the Company upon such
election, any federal, state or local taxes required to be withheld with respect
to such Restricted Stock. If the Executive shall fail to make such payment, the
Company shall, to the extent permitted by law, have the right to deduct from any
payment of any kind otherwise due to the Executive any federal, state or local
taxes of any kind required by law to be withheld with respect to such Restricted
Stock, as well as the rights set forth in Section 3.6(c) hereof. The Executive
acknowledges that it is his sole responsibility, and not the Company's, to file
timely the election under Section 83(b) of the Internal Revenue Code of 1986, as
amended, and any corresponding provisions of state tax laws if he elects to
utilize such election.

 

3.8       Special Incentive Compensation. The Executive agrees that the award of
the Restricted Stock hereunder is special incentive compensation and that it,
any dividends paid thereon (even if treated as compensation for tax purposes)
and any other RS Property will not be taken into account as "salary" or
"compensation" or "bonus" in determining the amount of any payment under any
pension, retirement or profit-sharing plan of the Company or any life insurance,
disability or other benefit plan of the Company.

 

3.9       Delivery Delay. The delivery of any certificate representing
Restricted Stock or other RS Property may be postponed by the Company for such
period as may be required for it to comply with any applicable federal or state
securities law, or any national securities exchange listing requirements and the
Company is not obligated to issue or deliver any securities if, in the opinion
of counsel for the Company, the issuance of such shares shall constitute a
violation by the Executive or the Company of any provisions of any law or of any
regulations of any governmental authority or any national securities exchange.

 

4.         Legend. All certificates representing shares of Restricted Stock
shall have endorsed thereon a legend referring to the terms, conditions and
restrictions applicable to such Restricted Stock, substantially in the following
form:

 

"The anticipation, alienation, attachment, sale, transfer, assignment, pledge,
encumbrance or charge of the shares of stock represented hereby are subject to
the terms and conditions (including forfeiture) of the Foot Locker (the
"Company") 2003 Stock Option and Award Plan and an Agreement entered into
between the registered owner and the Company dated as of February 9, 2005.
Copies of such Plan and Agreement are on file at the principal office of the
Company."

 

5.         Not an Employment Agreement. The issuance of the shares of Restricted
Stock hereunder does not constitute an agreement by the Company to continue to
employ

 

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the Executive during the entire, or any portion of the, term of this Agreement,
including but not limited to any period during which the Restricted Stock is
outstanding.

 

6.         Power of Attorney. The Company, its successors and assigns, is hereby
appointed the attorney-in-fact, with full power of substitution, of the
Executive for the purpose of carrying out the provisions of this Agreement and
taking any action and executing any instruments which such attorney-in-fact may
deem necessary or advisable to accomplish the purposes hereof, which appointment
as attorney-in-fact is irrevocable and coupled with an interest. The Company, as
attorney-in-fact for the Executive, may, in the name and stead of the Executive,
make and execute all conveyances, assignments and transfers of the Restricted
Stock, Shares and property provided for herein, and the Executive hereby
ratifies and confirms all that the Company, as said attorney-in-fact, shall do
by virtue hereof. Nevertheless, the Executive shall, if so requested by the
Company, execute and deliver to the Company all such instruments as may, in the
judgment of the Company, be advisable for the purpose.

 

7.

Miscellaneous.

 

7.1       This Agreement shall inure to the benefit of and be binding upon all
parties hereto and their respective heirs, legal representatives, successors and
assigns.

 

7.2       This Agreement constitutes the entire agreement between the parties
and cannot be changed or terminated orally. No modification or waiver of any of
the provisions hereof shall be effective unless in writing and signed by the
party against whom it is sought to be enforced.

 

7.3       This Agreement may be executed in one or more counterparts, all of
which taken together shall constitute one contract.

 

7.4       The failure of any party hereto at any time to require performance by
another party of any provision of this Agreement shall not affect the right of
such party to require performance of that provision, and any waiver by any party
of any breach of any provision of this Agreement shall not be construed as a
waiver of any continuing or succeeding breach of such provision, a waiver of the
provision itself, or a waiver of any right under this Agreement.

 

7.5      This Agreement is subject, in all respects, to the provisions of the
Plan, and to the extent any provision of this Agreement contravenes or is
inconsistent with any provision of the Plan, the provisions of the Plan shall
govern.

  

7.6       The headings of the sections of this Agreement have been inserted for
convenience of reference only and shall in no way restrict or modify any of the
terms or provisions hereof.

 

7.7       All notices, consents, requests, approvals, instructions and other
communications provided for herein shall be in writing and validly given or made
when

 

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delivered, or on the second succeeding business day after being mailed by
registered or certified mail, whichever is earlier, to the persons entitled or
required to receive the same, at, in the case of the Company, the address set
forth at the heading of this Agreement and, in the case of the Executive, his
principal residence address as shown in the records of the Company, or to such
other address as either party may designate by like notice. Notices to the
Company shall be addressed to the Chairman of the Compensation and Management
Resources Committee with a copy similarly sent to the General Counsel.

 

7.8   This Agreement shall be governed and construed and the legal relationships
of the parties determined in accordance with the internal laws of the State of
New York.

 

7.9   To indicate your acceptance of the terms of this Restricted Stock Award
Agreement, you must sign and deliver or mail not later than 30 days from the
date hereof, a copy of this Agreement to the General Counsel of the Company at
the address provided in the heading of this Agreement.

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.

 

 

FOOT LOCKER, INC.

 

 

By:/s/ James E. Preston

 

 

James E. Preston

 

 

Chair

 

 

Compensation and Management

 

Resources Committee

 

 

 

     /s/ Matthew D. Serra

 

 

Matthew D. Serra

 

 

   

 

 

 

 

 

 

                                 

 

 

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ACKNOWLEDGMENT

 

 

STATE OF NEW YORK

)

 

 

) s.s.:

COUNTY OF NEW YORK

)

 

 

 

 

 

 

On this 9th day of February 2005, before me personally appeared Matthew D. Serra
to me known to be the person described in and who executed the foregoing
agreement, and acknowledged that he executed the same as his free act and deed.

/s/ Sheilagh M. Clarke

 

Notary Public

 

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APPENDIX A

 

Change in Control

 

A Change in Control shall mean any of the following: (i) (A) the making of a
tender or exchange offer by any person or entity or group of associated persons
or entities (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934) (a "Person") (other than the Company or its
Affiliates) for shares of Common Stock pursuant to which purchases are made of
securities representing at least twenty percent (20%) of the total combined
voting power of the Company's then issued and outstanding voting securities; (B)
the merger or consolidation of the Company with, or the sale or disposition of
all or substantially all of the assets of the Company to, any Person other than
(a) a merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving or parent entity) fifty percent (50%) or more of the combined voting
power of the voting securities of the Company or such surviving or parent entity
outstanding immediately after such merger or consolidation; or (b) a merger or
capitalization effected to implement a recapitalization of the Company (or
similar transaction) in which no Person is or becomes the beneficial owner,
directly or indirectly (as determined under Rule 13d-3 promulgated under the
Securities Exchange Act of 1934), of securities representing more than the
amounts set forth in (C) below; (C) the acquisition of direct or indirect
beneficial ownership (as determined under Rule 13d-3 promulgated under the
Securities Exchange Act of 1934), in the aggregate, of securities of the Company
representing twenty percent (20%) or more of the total combined voting power of
the Company's then issued and outstanding voting securities by any Person acting
in concert as of the date of this Agreement; provided, however, that the Board
of Directors of the Company (referred to herein as the "Board") may at any time
and from time to time and in the sole discretion of the Board, as the case may
be, increase the voting security ownership percentage threshold of this item (C)
to an amount not exceeding forty percent (40%); or (D) the approval by the
shareholders of the Company of any plan or proposal for the complete liquidation
or dissolution of the Company or for the sale of all or substantially all of the
assets of the Company; or (ii) during any period of not more than two (2)
consecutive years, individuals who at the beginning of such period constitute
the Board, and any new director (other than a director designated by a person
who has entered into agreement with the Company to effect a transaction
described in clause (i)) whose election by the Board or nomination for election
by the Company's shareholders was approved by a vote of at least two-thirds
(2/3) of the directors then still in office who either were directors at the
beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute at least a majority
thereof.