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Exhibit 10.2
 
 

SYSTEMAX INC. RESTRICTED STOCK UNIT AGREEMENT

 
THIS RESTRICTED STOCK UNIT AGREEMENT (the “Agreement”) is made as of October 3,
2011 by and between SYSTEMAX INC., a Delaware corporation (the “Company”), and
DAVID SPROSTY (the “Recipient”).
 
WHEREAS, on October 3, 2011, the Company and the Recipient entered into an
Employment Agreement (the “Employment Agreement”), whereby the Recipient
performs services as the Chief Executive of the Company’s North America
Technology Group;
 
NOW, THEREFORE, the Company and the Recipient hereby agree as follows:
 
1.         Grant Pursuant to Plan. This Agreement and this grant of restricted
stock units are pursuant to, and subject to the terms of, the Company’s 2010
Long-Term Incentive Plan (the “Plan”), which is incorporated herein for all
purposes. The Recipient hereby acknowledges receipt of a copy of the Plan and
agrees to be bound by all of the terms and conditions of this Agreement and the
Plan. Unless otherwise provided herein, terms used in this Agreement that are
defined in the Plan and not defined herein shall have the meanings attributable
thereto in the Plan.
 
2.         Award of Restricted Stock Units. The Company hereby grants to the
Recipient 100,000 restricted stock units, transferable, in accordance with the
terms hereof, into common stock of the Company (collectively the “Restricted
Stock Units”). The parties hereto acknowledge that the terms of this Agreement
have been approved by a committee of the Board of Directors of the Company
consisting entirely of three non-employee directors.
 
3.         Vesting of Restricted Stock Units.
 
(a) Except as otherwise provided in this Agreement, or in the Plan, the
Restricted Stock Units shall vest in ten equal annual installments of 10,000
units commencing on October 3, 2012 and ending on October 3, 2021 (the “Vesting
Dates”), which shall be cumulative, provided that the Recipient continues to be
employed with the Company through and on the applicable Vesting Dates.
 
Except as otherwise specifically provided herein there shall be no proportionate
or partial vesting in the periods prior to each Vesting Date, and all vesting
shall occur only on the appropriate Vesting Date. Upon the termination of the
Recipient’s employment, any unvested portion of the Restricted Stock Units that
does not become vested pursuant to the provisions hereof as a result of such
termination shall terminate and be null and void. Any portion of the Restricted
Stock Units subject to this Agreement that is and has become vested pursuant to
this Section 3 shall be referred to as “Vested Units,” and any portion of the
Restricted Stock Units that is and has not yet become vested shall be referred
to as the “Non-Vested Units.”
 
(b) Notwithstanding any other term or provision of this Agreement, if the
Recipient’s employment with the Company or its successor shall be terminated by
the Company or its successor without Cause or by the Recipient for Good Reason
within six (6) months following a Change of Control, the Recipient shall become
immediately vested in all Non-Vested Units and shall become immediately entitled
to a distribution of that number of shares of Common Stock of the Company that
is represented by those Vested Units.
 
   
(c) Notwithstanding any other term or provision of this Agreement:
 
(i) if the Recipient’s employment with the Company is terminated without Cause
or For Good Reason, then as of the Date of Termination the Recipient shall
become immediately vested in all Non-Vested Units and shall become immediately
entitled to a distribution of that number of shares of Common Stock of the
Company that is represented by those Vested Units, and
 
(ii) if the Recipient’s employment with the Company is terminated due to the
Recipient’s disability or death, the Recipient or the Recipient’s estate or
designated beneficiary(ies), whichever is applicable, shall become immediately
vested in 50% of the Non- Vested Units.

(d) For purposes of this Agreement, the terms “Cause,” “Good Reason,” “Change of
Control”, “Date of Termination” and “Total Disability” shall have the same
meanings as set forth in the Employment Agreement.

4.         Delivery of Shares Represented by the Restricted Stock Units
 
(a) Except as otherwise set forth in the Employment Agreement, the Company shall
deliver to the Recipient, within 30 days after the occurrence of the
Distribution Event, the shares of Common Stock of the Company that are
represented by the Vested Units under this Agreement. For this purpose, a
“Distribution Event” shall occur on the earliest of (i) the date on which the
Restricted Stock Units become vested; (ii) the date on which the Recipient is no
longer an employee of the Company for any reason; or (iii) the date on which a
Change of Control (as defined in the Employment Agreement) occurs.
 
(b) All of the stock certificates evidencing any shares of Common Stock that are
represented by the Restricted Stock Units pursuant to this Agreement shall bear
appropriate legends restricting the sale or other transfer of the shares of
Common Stock in accordance with applicable state and federal securities laws,
this Agreement and the Plan.
 
5.         Rights with Respect to Shares of Common Stock Represented by
Restricted Stock Units.
 
(a) Except as otherwise provided in this Section 5, the Recipient shall not have
any rights, benefits or entitlements with respect to any shares of Common Stock
that are represented by the Restricted Stock Units subject to this Agreement
unless and until a Distribution Event has occurred.
 
(b) Notwithstanding Section 5(a) hereof, during the term of this Agreement, the
Recipient shall have the right to receive distributions (the “Dividend
Equivalent Payments”) from the Company equal to any dividends or other
distributions (cash or securities) that would have been distributed to the
Recipient if each of the Restricted Stock Units instead were an issued and
outstanding share of Common Stock owned by the Recipient. The Dividend
Equivalent Payments, reduced by any applicable withholding taxes, shall be made
at the same time, in the same form and in the same manner as dividends are paid
to the holders of Common Stock of the Company; provided, however, that if the
dividend declared is a stock dividend, then any shares of Common Stock issued to
the Recipient with respect to the Restricted Stock Units subject to this
Agreement shall have the same status and bear the same legend as the Restricted
Stock Units and shall be held by the Company until a Distribution Event, unless
otherwise determined by the Committee.
 
(c) On or after a Distribution Event, the Recipient shall have, with respect to
shares of the Common Stock that are represented by the Restricted Stock Units
subject to this Agreement, all of the rights of an equity interest holder of the
Company, including the right to vote the shares of the Common Stock and the
right to receive all dividends, if any, as may be declared on the shares of the
Common Stock from time to time until such time.
 
(d) In the event that the number of shares of Common Stock of the Company, as a
result of a combination of the Common Stock or any other change or exchange for
other securities, by reclassification, reorganization or otherwise, is increased
or decreased or changed into or exchanged for a different number or kind of
shares of Common Stock or other securities of the Company or of another entity,
the number of Restricted Stock Units subject to this Agreement shall be
appropriately adjusted to reflect that change. If any adjustment shall result in
a fractional share, the fraction shall be disregarded.
 
6.         Tax Withholding. On or before a Distribution Event or the date on
which the Recipient becomes entitled to receive a Dividend Equivalent Payment,
as a condition to the Company’s obligations with respect to the Restricted Stock
Units (including, without limitation, any obligation to deliver any shares of
Common Stock or make any Dividend Equivalent Payments hereunder), the Recipient
shall make arrangements satisfactory to the Company to pay to the Company any
federal, state or local taxes of any kind required to be withheld with respect
to its delivery of the shares of Common Stock and Dividend Equivalent Payments.
If the Recipient shall fail to make the tax payments as are required, the
Company shall, to the extent permitted by law, have the right to deduct from any
payment of any kind otherwise due to the Recipient any federal, state or local
taxes of any kind required by law to be withheld with respect to the shares of
the Common Stock or any Dividend Equivalent Payments.
 
7.         Registration of Shares of Common Stock. If and to the extent it has
not already done so, the Company shall register with the Securities and Exchange
Commission (“SEC”), on a Form S-8 or such other required form, the shares of
Common Stock that are represented by the Restricted Stock Units under this
Agreement.
 
8.         Amendment, Modification and Assignment. No provision of this
Agreement may be modified, waived or discharged unless that waiver, modification
or discharge is agreed to in writing signed by the Recipient and the Company. No
waiver by either party of any breach by the other party to this Agreement of any
condition or provision of this Agreement shall be deemed a waiver of any other
conditions or provisions of this Agreement. No agreements or representations,
oral or otherwise, express or implied, with respect to the subject matter hereof
have been made by either party which are not set forth expressly in this
Agreement. Unless otherwise consented to by the Committee, this Agreement shall
not be assigned by the Recipient in whole or in part. The rights and obligations
created under this Agreement shall be binding on the Recipient and his heirs and
legal representatives and on the successors and assigns of the Company.
 
9.         Transferability. The Restricted Stock Units granted under this
Agreement are not transferable otherwise than by will or under the applicable
laws of descent and distribution. In addition, the Restricted Stock Units shall
not be assigned, negotiated, pledged or hypothecated in any way (whether by
operation of law or otherwise), and the Restricted Stock Units shall not be
subject to execution, attachment or similar process.
 
10.         Beneficiary Designation. The Recipient shall have the right to
designate, on a beneficiary designation form satisfactory to the Committee which
shall be filed with the Company, a beneficiary or beneficiaries to receive any
unpaid shares of Common Stock and/or Dividend Equivalent Payments under this
Agreement in the event of the death of the Recipient. In the event that the
Recipient shall not file a beneficiary designation form with the Company, or if
none of the designated beneficiaries survive the Recipient, then any unpaid
shares of Common Stock and/or Dividend Equivalent Payments under this Agreement
shall be paid to the estate of the Recipient.
 
11.         Miscellaneous.
 
(a) No Right to Employment or Service. The grant of this Restricted Stock Unit
award shall not confer, or be construed to confer, upon the Recipient any right
to be employed by or perform services for the Company or its subsidiaries or
affiliates.
 
(b) No Limit on Other Compensation Arrangements. Nothing contained in this
Agreement shall preclude the Company or the Subsidiary from adopting or
continuing in effect other or additional compensation arrangements, and those
arrangements may be either generally applicable or applicable only in specific
cases.
 
(c) Severability. If any provision of this Agreement is or becomes or is deemed
to be invalid, illegal or unenforceable in any jurisdiction or would disqualify
this Agreement or the award of Restricted Stock Units under any applicable law,
that provision shall be construed or deemed amended to conform to applicable law
(or if that provision cannot be so construed or deemed amended without
materially altering the purpose or intent of this Agreement and the award of
Restricted Stock Units, that provision shall be stricken as to that jurisdiction
and the remainder of this Agreement and the award shall remain in full force and
effect).
 
(d) No Trust or Fund Created. Neither this Agreement nor the grant of the award
of Restricted Stock Units shall create or be construed to create a trust or
separate fund of any kind or a fiduciary relationship between the Company and
the Recipient or any other person. The Restricted Stock Units subject to this
Agreement represent only the Company’s unfunded and unsecured promise to issue
shares of Common Stock to the Recipient in the future. To the extent that the
Recipient or any other person acquires a right to receive payments from the
Company pursuant to this Agreement, that right shall be no greater than the
right of any unsecured general creditor of the Company.

(e) Governing Law. The validity, interpretation, construction and performance of
this Agreement shall be governed by the laws of the State of Delaware.
 
(f) Interpretation. The Recipient accepts this award of Restricted Stock Units
subject to all the terms and provisions of this Agreement and the terms and
conditions of the Plan.
 
(g) Headings. Headings are given to the Paragraphs and Subparagraphs of this
Agreement solely as a convenience to facilitate reference. The headings shall
not be deemed in any way material or relevant to the construction or
interpretation of this Agreement or any provision thereof.
 
12.         Complete Agreement. This Agreement and those agreements and
documents expressly referred to herein embody the complete agreement and
understanding among the parties and supersede and preempt any prior
understandings, agreements or representations by or among the parties, written
or oral, which may have related to the subject matter of this Agreement in any
way.
 
IN WITNESS WHEREOF, the parties have executed this Agreement on the date first
written above.

 
SYSTEMAX INC.,
a Delaware corporation

 
By:____________________
Name:
Title:

 
Agreed and Accepted:

____________________
DAVID SPROSTY

 
 

 
 

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