Exhibit 10.8

 

SWS GROUP, INC. 2003 RESTRICTED STOCK PLAN

 

RESTRICTED STOCK AGREEMENT

FOR NON-EMPLOYEE DIRECTORS

 

Grantee:    __________________________________________ Address:   
__________________________________________     
__________________________________________ Number of Awarded Shares:   
__________________________________________ Date of Grant:   
__________________________________________

 

Vesting of Awarded Shares:

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   Date

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   No. Shares

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   Vested %

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                         ¨ %                        ¨ %                        ¨
%                        ¨ %               

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Total

             100 %

 

SWS Group, Inc., a Delaware corporation (the “Company”), hereby grants to the
individual whose name appears above (“Grantee”), pursuant to the provisions of
the SWS Group, Inc. 2003 Restricted Stock Plan, as amended from time to time in
accordance with its terms (the “Plan”), a restricted stock award (this “Award”)
of shares (the “Awarded Shares”) of its common stock, par value $0.10 per share
(the “Common Stock”), effective as of the date of grant as set forth above (the
“Grant Date”), upon and subject to the terms and conditions set forth in this
Restricted Stock Agreement (this “Agreement”) and in the Plan, which are
incorporated herein by reference. Unless otherwise defined in this Agreement,
capitalized terms used in this Agreement shall have the meanings assigned to
them in the Plan.

 

1. EFFECT OF THE PLAN. The Awarded Shares granted to Grantee are subject to all
of the provisions of the Plan and of this Agreement, together with all rules and
determinations from time to time issued by the Committee and by the Board
pursuant to the Plan. The Company hereby reserves the right to amend, modify,
restate, supplement or terminate the Plan without the consent of Grantee, so
long as such amendment, modification, restatement or supplement shall not
materially reduce the rights and benefits available to Grantee hereunder, and
this Award shall be subject, without further action by the Company or Grantee,
to such amendment, modification, restatement or supplement unless provided
otherwise therein.

 

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2. GRANT. This Award shall evidence Grantee’s ownership of the Awarded Shares.
Grantee agrees that Awarded Shares shall be subject to all of the terms and
conditions set forth in this Agreement and the Plan, including, but not limited
to, the forfeiture conditions set forth in Section 4 of this Agreement and the
restrictions on transfer set forth in Section 5 of this Agreement. Grantee
acknowledges that he or she will not receive a stock certificate representing
the Awarded Shares unless and until the Awarded Shares vest as provided in this
Award. The Awarded Shares will be held in custody for Grantee, by the Company or
in a book entry account with the Company’s transfer agent, until the Awarded
Shares have vested in accordance with Section 3 of this Award. Upon vesting of
the Awarded Shares, the Company shall deliver or shall instruct its transfer
agent to deliver to Grantee all Vested Awarded Shares (as defined below).

 

3. VESTING SCHEDULE; SERVICE REQUIREMENT. Except as provided otherwise in
Section 4 of this Agreement, the Awarded Shares shall vest if the Grantee does
not experience a Termination of Service during the period commencing with the
Grant Date and ending with the applicable date that such portion of the Awarded
Shares vests (each, a “Vesting Date”). Awarded Shares that have vested pursuant
to this Agreement are referred to herein as “Vested Awarded Shares” and Awarded
Shares that have not yet vested pursuant to this Agreement are referred to
herein as “Unvested Awarded Shares.” Subject to the provisions of Section 4 of
this Agreement, if the Grantee does not experience a Termination of Service
prior to an applicable Vesting Date,              percent (    %) of the Awarded
Shares will vest on the first Vesting Date; an additional              percent
(    %) of the Awarded Shares will vest on the second Vesting Date; [include
such additional Vesting Dates, if any, as are necessary] and the remaining
             percent (    %) of the Awarded Shares will vest on the final
Vesting Date, all as set forth on the first page of this Agreement under the
heading “Vesting of Awarded Shares.” If an installment of the vesting would
result in a fractional Vested Awarded Share, such installment will be rounded to
the next higher or lower Awarded Share, as determined by the Company, except the
final installment, which will be for the balance of the Awarded Shares.

 

4. CONDITIONS OF FORFEITURE.

 

(a) Upon the Grantee’s Termination of Service (the “Termination Date”) for any
reason except as a result of Grantee’s not being nominated for or elected to a
new term as a Non-employee Director, or Grantee’s resignation at the request and
for the convenience of the Company other than for “Cause” (as defined in Section
4(b) of this Agreement) before all of the Awarded Shares become Vested Awarded
Shares, all Unvested Awarded Shares as of the Termination Date shall, without
further action of any kind by the Company or Grantee, be forfeited. Unvested
Awarded Shares that are forfeited shall be deemed to be immediately transferred
to the Company without any payment by the Company or action by Grantee, and the
Company shall have the full right to cancel any evidence of Grantee’s ownership
of such forfeited Unvested Awarded Shares and to take any other action necessary
to demonstrate that Grantee no longer owns such forfeited Unvested Awarded
Shares automatically upon such forfeiture. Following such forfeiture, Grantee
shall have no further rights with respect to such forfeited Unvested Awarded
Shares. Grantee, by his acceptance of the Award granted pursuant to this
Agreement, irrevocably grants to the Company a power of attorney to transfer
Unvested Awarded Shares that are forfeited to the Company and agrees to execute
any documents requested by the Company in connection with such forfeiture and
transfer. The provisions of this Agreement regarding transfers of Unvested
Awarded Shares that are forfeited shall be specifically performable by the
Company in a court of equity or law.

 

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(b) Notwithstanding anything to the contrary in this Agreement, the Unvested
Awarded Shares shall become vested (i) on the death of Grantee during Grantee’s
term as a Non-employee Director, (ii) on Grantee’s Termination of Service as a
result of not being nominated for or elected to a new term as a Non-employee
Director, or (iii) on Grantee’s resignation as a Non-employee Director at the
request and for the convenience of the Company other than for Cause. In
addition, the Unvested Awarded Shares shall become vested earlier than the times
otherwise provided in this Agreement in accordance with the provisions of
Article 10 of the Plan relating to a Change in Control event. For purposes of
this Agreement, “Cause” shall mean (i) Grantee’s willful, material and
irreparable breach of any agreement that governs the terms and conditions of his
or her service to the Company; (ii) Grantee’s breach of any fiduciary or other
material duty to the Company or its stockholders; (iii) Grantee’s gross
negligence or gross incompetence in the performance or intentional
nonperformance (continuing for ten days after receipt of written notice of such
negligence) of any of Grantee’s material duties and responsibilities; (iv)
Grantee’s dishonesty, fraud or misconduct with respect to the business or
affairs of the Company or a Subsidiary; (v) Grantee’s conviction of a felony
crime; or (vi) chronic alcohol abuse or illegal drug abuse by Grantee.

 

5. NON-TRANSFERABILITY. Grantee may not sell, transfer, pledge, exchange,
hypothecate, or otherwise encumber or dispose of any of the Unvested Awarded
Shares, or any right or interest therein, by operation of law or otherwise,
except only with respect to (i) a gratuitous transfer with the prior written
consent of the Company or (ii) a transfer of title effected pursuant to
Grantee’s will or the laws of descent and distribution following Grantee’s
death. References to Grantee, to the extent relevant in the context, shall
include references to authorized transferees. Any transfer in violation of this
Section 5 shall be void and of no force or effect, and shall result in the
immediate forfeiture of all Unvested Awarded Shares.

 

6. DIVIDEND AND VOTING RIGHTS. Subject to the restrictions contained in this
Agreement, Grantee shall have the rights of a stockholder with respect to the
Awarded Shares, including the right to vote all such Awarded Shares, including
Unvested Awarded Shares, and to receive all dividends, cash or stock, paid or
delivered thereon, from and after the date hereof. In the event of forfeiture of
Unvested Awarded Shares, Grantee shall have no further rights with respect to
such Unvested Awarded Shares. However, the forfeiture of the Unvested Awarded
Shares pursuant to Section 4 hereof shall not create any obligation to repay
cash dividends received as to such Unvested Awarded Shares, nor shall such
forfeiture invalidate any votes given by Grantee with respect to such Unvested
Awarded Shares prior to forfeiture.

 

7. CAPITAL ADJUSTMENTS AND CORPORATE EVENTS. If, from time to time during the
term of this Agreement, there is any capital adjustment affecting the
outstanding Common Stock as a class without the Company’s receipt of
consideration, the Unvested Shares shall be adjusted in accordance with the
provisions of Article 9 of the Plan. Any and all new, substituted or additional
securities to which Grantee may be entitled by reason of Grantee’s ownership of
the Unvested Awarded Shares hereunder because of a capital adjustment shall be
immediately subject to the forfeiture provisions of this Agreement and included
thereafter as “Unvested Awarded Shares” for purposes of this Agreement.

 

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8. REFUSAL TO TRANSFER. The Company shall not be required (i) to transfer on its
books any Unvested Awarded Shares that have been sold or otherwise transferred
in violation of any of the provisions of this Agreement or the Plan, or (ii) to
treat as owner of such Unvested Awarded Shares, or accord the right to vote or
pay or deliver dividends or other distributions to, any purchaser or other
transferee to whom or which such Unvested Awarded Shares shall have been so
transferred.

 

9. TAX MATTERS. Grantee acknowledges that the tax consequences associated with
the award are complex and that the Company has urged Grantee to review with
Grantee’s own tax advisors the federal, state, and local tax consequences of
this Award. Grantee is relying solely on such advisors and not on any statements
or representations of the Company or any of its agents. Grantee understands that
Grantee (and not the Company) shall be responsible for Grantee’s own tax
liability that may arise as a result of the Award. Grantee understands further
that Section 83 of the Internal Revenue Code of 1986, as amended (the “Code”),
taxes as ordinary income the fair market value of the Awarded Shares as of the
Vesting Date. Grantee also understands that Grantee may elect to be taxed at
Grant Date rather than at the time the Awarded Shares vest by filing an election
under Section 83(b) of the Code with the Internal Revenue Service and by
providing a copy of the election to the Company. GRANTEE ACKNOWLEDGES THAT HE OR
SHE HAS BEEN INFORMED OF THE AVAILABILITY OF MAKING AN ELECTION IN ACCORDANCE
WITH SECTION 83(b) OF THE CODE; THAT SUCH ELECTION MUST BE FILED WITH THE
INTERNAL REVENUE SERVICE (AND A COPY OF THE ELECTION GIVEN TO THE COMPANY)
WITHIN 30 DAYS OF THE GRANT OF AWARDED SHARES TO GRANTEE; AND THAT GRANTEE IS
SOLELY RESPONSIBLE FOR MAKING SUCH ELECTION.

 

10. ENTIRE AGREEMENT: GOVERNING LAW. The Plan and this Agreement constitute the
entire agreement of the Company and Grantee (collectively, the “Parties”) with
respect to the subject matter hereof and supersede in their entirety all prior
undertakings and agreements of the Parties with respect to the subject matter
hereof. If there is any inconsistency between the provisions of this Agreement
and of the Plan, the provisions of the Plan shall govern. Nothing in the Plan
and this Agreement (except as expressly provided therein or herein) is intended
to confer any rights or remedies on any person other than the Parties. The Plan
and this Agreement are to be construed in accordance with and governed by the
internal laws of the State of Texas, without giving effect to any choice-of-law
rule that would cause the application of the laws of any jurisdiction other than
the internal laws of the State of Texas to the rights and duties of the Parties.
Should any provision of the Plan or this Agreement relating to the Shares be
determined by a court of law to be illegal or unenforceable, such provision
shall be enforced to the fullest extent allowed by law and the other provisions
shall nevertheless remain effective and shall remain enforceable.

 

11. INTERPRETIVE MATTERS. Whenever required by the context, pronouns and any
variation thereof shall be deemed to refer to the masculine, feminine, or
neuter, and the singular shall include the plural, and vice versa. The term
“include” or “including” does not denote or imply any limitation. The captions
and headings used in this Agreement are inserted for convenience and shall not
be deemed a part of the Restricted Stock Award or this Agreement for
construction or interpretation.

 

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12. DISPUTE RESOLUTION. The provisions of this Section 12 shall be the exclusive
means of resolving disputes of the Parties (including any other persons claiming
any rights or having any obligations through the Company or Grantee) arising out
of or relating to the Plan and this Agreement. The Parties shall attempt in good
faith to resolve any disputes arising out of or relating to the Plan and this
Agreement by negotiation between individuals who have authority to settle the
controversy. Negotiations shall be commenced by either Party by a written
statement of the Party’s position and the name and title of the individual who
will represent the Party. Within thirty (30) days of the written notification,
the Parties shall meet at a mutually acceptable time and place, and thereafter
as often as they reasonably deem necessary, to resolve the dispute. If the
dispute has not been resolved by negotiation within ninety (90) days of the
written notification of the dispute, then, to the extent applicable, resolution
of the dispute, shall be determined by arbitration. Any arbitration under this
Agreement shall be conducted pursuant to the federal arbitration act before the
National Association of Securities Dealers, Inc. or the Municipal Securities
Rulemaking Board and in accordance with the rules then prevailing at the
selected organization. The Grantee may elect in the first instance whether
arbitration shall be by the National Association of Securities Dealers, Inc. or
the Municipal Securities Rulemaking Board, but if the Grantee fails to make such
election, by registered letter or telegram addressed to the Company at the
Company’s main office, before the expiration of ten days after receipt of a
written request from the Company to make such election, then the Company may
make such election. The award of the arbitrators, or of the majority of them,
shall be final, and judgment upon the award rendered may be entered in any
court, state or federal, having jurisdiction. Further, no person shall bring a
putative or certified class action to arbitration, nor seek to enforce any
pre-dispute arbitration agreement against any person who has initiated in court
a putative class action; who is a member of a putative class who has not opted
out of the class with respect to any claims encompassed by the putative class
action until: (i) the class certification is denied; (ii) the class is
decertified; or (iii) the customer is excluded from the class by the court. Such
forbearance to enforce an agreement to arbitrate shall not constitute a waiver
of any rights under this Agreement except to the extent stated herein.
Arbitration shall be final and binding on the Parties. The Parties are waiving
their right to seek remedies in court, including the right to jury trial.
Pre-arbitration discovery is generally more limited than and different from
court proceedings. The arbitrators’ award is not required to include factual
findings or legal reasoning and a Party’s right to appeal or seek modification
of rulings by the arbitrators is strictly limited. The panel of arbitrators will
typically include a minority of arbitrators who were or are affiliated with the
securities industry. If such arbitration provision is found inapplicable, then
either Party may file suit and each Party agrees that any suit, action, or
proceeding arising out of or relating to the Plan or this Agreement shall be
brought in the United States District Court for the Northern District of Texas
(or should such court lack jurisdiction to hear such action, suit or proceeding,
in a Texas state court in Dallas County, Texas) and that the Parties shall
submit to the jurisdiction of such court. The Parties irrevocably waive, to the
fullest extent permitted by law, any objection a Party may have to the laying of
venue for any such suit, action or proceeding brought in such court. THE PARTIES
ALSO EXPRESSLY WAIVE ANY RIGHT THEY HAVE OR MAY HAVE TO A JURY TRIAL OF ANY SUCH
SUIT, ACTION OR PROCEEDING. If any one or more provisions of this Section 12
shall for any reason be held invalid or unenforceable, it is the specific intent
of the Parties that such provisions shall be modified to the minimum extent
necessary to make it or its application valid and enforceable.

 

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13. NON-SOLICITATION. In consideration for the grant of this Award, the Grantee
hereby agrees that during Grantee’s Term as a Non-employee Director and for one
year thereafter, the Grantee shall not solicit any person who is an Employee of
the Company or any Subsidiary for the purpose or with the intent of enticing
such Employee away from or out of the employ of the Company or any Subsidiary.
If Grantee solicits any person who is an Employee of the Company or any
Subsidiary for the purpose of enticing such Employee away from or out of the
employ of the Company or any Subsidiary, Grantee hereby agrees to pay the
Company or the affected Subsidiary $50,000 for each such Employee that leaves
the employ of the Company or a Subsidiary for employment with the Grantee or the
Grantee’s employer as a result of such solicitation.

 

14. PAYMENT OF PAR VALUE. In connection with the issuance of the Awarded Shares
pursuant to this Agreement, the Company will pay the aggregate par value per
share of the Awarded Shares on behalf of Grantee and will report the amount of
such payment as income to Grantee for the taxable period of Grantee during which
the Awarded Shares are granted.

 

15. AMENDMENT: WAIVER. This Agreement may be amended or modified only by means
of a written document or documents signed by the Company and Grantee. Any
provision for the benefit of the Company contained in this Agreement may be
waived, either generally or in any particular instance, by the Board or by the
Committee. A waiver on one occasion shall not be deemed to be a waiver of the
same or any other breach on a future occasion.

 

16. NOTICE. Any notice or other communication required or permitted hereunder
shall be given in writing and shall be deemed given, effective, and received
upon prepaid delivery in person or by courier or upon the earlier of delivery or
the third business day after deposit in the United States mail if sent by
certified mail, with postage and fees prepaid, addressed to the other Party at
its address as shown beneath its signature in this Agreement, or to such other
address as such Party may designate in writing from time to time by notice to
the other Party in accordance with this Section 16.

 

SWS GROUP, INC. By:   ___________________________________________ Title:  
___________________________________________ Address:  
___________________________________________    
___________________________________________

 

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GRANTEE ACKNOWLEDGES AND AGREES THAT THE SHARES SUBJECT TO THIS RESTRICTED STOCK
AWARD SHALL VEST AND THE FORFEITURE RESTRICTIONS SHALL LAPSE, IF AT ALL, ONLY
DURING THE PERIOD OF GRANTEE’S TERM AS A NON-EMPLOYEE DIRECTOR OR AS OTHERWISE
PROVIDED IN THIS AGREEMENT (NOT THROUGH THE ACT OF BEING GRANTED THE RESTRICTED
STOCK AWARD). GRANTEE FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS
AGREEMENT OR THE PLAN SHALL CONFER UPON GRANTEE ANY RIGHT WITH RESPECT TO FUTURE
AWARDS OR CONTINUATION OF GRANTEE’S SERVICE AS A NON-EMPLOYEE DIRECTOR. Grantee
acknowledges receipt of a copy of the Plan, represents that he or she is
familiar with the terms and provisions thereof, and hereby accepts the
Restricted Stock Award subject to all of the terms and provisions hereof and
thereof. Grantee has reviewed this Agreement and the Plan in their entirety, has
had an opportunity to obtain the advice of counsel prior to executing this
Agreement, and fully understands all provisions of this Agreement and the Plan.
Grantee hereby agrees that all disputes arising out of or relating to this
Agreement and the Plan shall be resolved in accordance with Section 12 of this
Agreement. Grantee further agrees to notify the Company upon any change in the
address for notice indicated in this Agreement.

 

DATED:                         SIGNED:  
___________________________________________          GRANTEE      Address:  
___________________________________________         
___________________________________________

 

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