RESTRICTED STOCK AGREEMENT KAYDON CORPORATION 1999 Long Term Stock Incentive Plan
EXHIBIT 10.4.2
KAYDON CORPORATION
1999 Long Term Stock Incentive Plan
1999 Long Term Stock Incentive Plan
Grantee: XXXXX X’XXXXX
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Xxxxx Date: March 23, 2007 | ||
| Address: | 000 X. Xxxxxxxxxx Xxxx, Xxx 000
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Number of Shares: 100,000 | |
Xxx Xxxxx, XX 00000
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This Restricted Stock Agreement (the “Agreement”) is made as of March 23, 2007 (the “Grant
Date”), between KAYDON CORPORATION, a Delaware corporation (the “Company”), and XXXXX X’XXXXX
(“Grantee”).
The Company and Grantee have entered into an Employment Agreement, dated March 23, 2007 (the
“Employment Agreement”), which provides for the granting of restricted stock to Grantee pursuant to
the Kaydon Corporation 1999 Long Term Stock Incentive Plan (the “Plan”). The Plan is administered
by the Compensation Committee of the Company’s Board of Directors (the “Committee”). Grantee
acknowledges receipt of a copy of the Prospectus for the Plan and accepts these shares of
restricted stock subject to all of the terms, conditions, and provisions of this Agreement and the
Plan.
1. Grant of Restricted Stock. On March 23, 2007, the Committee granted restricted stock to
Grantee, and Grantee hereby accepts, 100,000 shares of $0.10 par value Common Stock of the Company
(the “Restricted Stock”), subject to the terms and conditions of this Agreement, the Plan and the
Employment Agreement.
2. Conditions. The Company awards the Restricted Stock to Grantee subject to the conditions
described below and to a vesting schedule. Those conditions must be met or otherwise lapse, and
vesting must occur, before Grantee will receive any stock under this Agreement. If Grantee
breaches the terms of this Agreement or ceases to be employed by the Company for certain reasons as
described in this Agreement, if the applicable restrictions are not satisfied or do not lapse, or
if Grantee does not vest in some or all of the Restricted Stock, Grantee will promptly surrender to
the Company those shares of Restricted Stock as to which the restrictions have not lapsed or in
which Grantee’s interest has not vested pursuant to this Agreement as set forth below.
3. Restrictions On and Vesting of Restricted Stock. If Grantee is then employed by the
Company and has not breached the terms of this Agreement, the restrictions on twenty thousand
(20,000) shares of Restricted Stock will lapse and the Grantee will vest in those shares on each
March 23, commencing on March 23, 2008. Vesting under this provision will continue
until all of the shares are vested, the Grantee is no longer employed by the Company, or
another provision of this Agreement supersedes this section, whichever occurs first. In addition
to the accelerated vesting provided under the Employment Agreement, the Committee may, in its sole
discretion, accelerate the lapsing of restrictions and the vesting of the Restricted Stock at any
time before the restrictions would otherwise lapse or before full vesting. As restrictions lapse
and vesting occurs, a certificate for the number of shares of Restricted Stock as to which
restrictions have lapsed will be delivered to the Grantee.
4. Transferability. Unless the Committee otherwise consents or the Plan otherwise explicitly
provides, Grantee will not sell, exchange, transfer, pledge, or otherwise dispose of the Restricted
Stock at any time, whether voluntarily or involuntarily, by operation of law or otherwise. The
provisions of this paragraph will not apply to Restricted Stock that has vested pursuant to this
Agreement. If Grantee violates the restrictions in this Section, Grantee’s right to shares of
Restricted Stock remaining subject to restrictions or which have not yet vested will immediately
cease and terminate and Grantee will immediately forfeit and surrender all shares of Restricted
Stock that are still subject to restrictions or which have not yet vested to the Company.
5. Rights as a Shareholder. Grantee will have certain rights as a shareholder with respect to
the Restricted Stock, including but not limited to the right to vote the Restricted Stock at
shareholders’ meetings, the right to receive, without restriction, all cash dividends paid with
respect to the Restricted Stock, and the right to participate with respect to the Restricted Stock
in any stock dividend, stock split, recapitalization, or other adjustment in the capital stock of
the Company, or any merger, consolidation, or other reorganization involving an increase, decrease,
or adjustment in the capital stock of the Company.
(a) Substitute Shares. Any shares or other security received as a result of any stock
dividend, stock split, or reorganization will be subject to the same terms, conditions, and
restrictions as those relating to the Restricted Stock granted under this Agreement.
(b) Registration. Certificates for the shares of stock evidencing the Restricted Stock
will not be issued but the shares will be registered in Grantee’s name in book entry form as
soon as administratively feasible after Grantee’s acceptance of this Agreement.
6. Termination of Employee Status. If Grantee ceases to be an employee of the Company:
(a) Due to Disability or Death. By reason of Permanent and Total Disability (as
defined in the Plan) (“Disability”) or death, all shares of Restricted Stock will vest on
the date of death or Disability.
(b) Due to Retirement. By reason of retirement at or after age 65, the shares of
Restricted Stock will continue to vest in the same manner as though employment had not
terminated. If unforfeited Restricted Stock remains unvested at Grantee’s death following
retirement from employment at or after attainment of age 65, all shares of Restricted Stock
will vest on the date of death.
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(c) Due to Reasons Other Than Retirement, Disability or Death. For any reason other
than death, Disability, or retirement at or after age 65, any other termination of Grantee’s
employment, with or without cause, or upon a Change in Control, the provision of the
Employment Agreement shall govern the vesting of Restricted Stock held by Grantee at the
time of termination. Any shares of Restricted Stock that do not vest pursuant to the
Employment Agreement will automatically be forfeited and returned to the Company. As used
herein, “Change in Control” shall have the meaning given to it in the Employment Agreement
(and not the Plan).
Notwithstanding the foregoing, if at any time following termination of employment Grantee
engages in an activity which, in the sole judgment of the Committee, is detrimental to the
interests of the Company, all shares of Restricted Stock for which restrictions have not lapsed or
which have not yet vested will be forfeited to the Company.
7. Employment by the Company. Nothing in this Agreement imposes upon the Company any
obligation to retain Grantee in the employ of the Company for any given period or upon any specific
terms of employment.
8. Tax Withholding. Grantee authorizes the Company to:
(a) Withhold. Withhold and deduct from future wages of Grantee (or from other amounts
that may be due and owing to Grantee from the Company, or make other arrangements for the
collection of, all amounts deemed necessary to satisfy any and all federal, state, and local
withholding and employment-related tax requirements attributable to an award of Restricted
Stock; or
(b) Remit. Require Grantee promptly to remit the amount of such withholding to the
Company before taking any action with respect to the Restricted Stock.
9. Acknowledgment. By signing this Agreement and accepting the Restricted Stock, Grantee:
(a) Representation. Acknowledges acceptance of the Restricted Stock and receipt of the
documents referred to in this Agreement, represents that Grantee is familiar with the
provisions of the Plan and agrees to its incorporation in this Agreement, agrees to all of
the other terms and conditions of this Agreement and agrees to promptly provide any
information with respect to the Restricted Stock reasonably requested by the Company;
(b) Taxes. Agrees to comply with the requirements of applicable federal and other laws
with respect to withholding or providing for the payment of required taxes;
(c) Limitation of Rights. Acknowledges that all of Grantee’s rights to the Restricted
Stock are embodied in this Agreement, the Plan and the Employment Agreement;
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(d) Employment. Agrees that while Grantee is employed by the Company, the Grantee will
devote full business time and energies to the business and affairs of the Company and will
not, without the Company’s written consent, accept other employment or permit any personal
business interests to interfere with the performance of Grantee’s duties; and
(e) Duties. Agrees to use Grantee’s best efforts, skill and abilities to promote the
interests of the Company, to work with other employees of the Company in a competent and
professional manner and generally to promote the interests of the Company and to perform
such other duties of a management or professional nature as may be assigned to Grantee.
10. Commitments of Grantee. Notwithstanding any other provisions of this Agreement, the Plan
or the Employment Agreement, in consideration of the grant of Restricted Stock to Grantee and the
benefits conferred by the Employment Agreement, in recognition of the highly competitive nature of
the industries in which the Company conducts its business and to further protect the goodwill of
the Company and to promote and preserve its legitimate business interests, Grantee will not:
(a) Confidentiality. Disclose the contents of any Proprietary Information of the
Company. Proprietary Information means information or material of the Company which is not
generally available to or used by others or the utility or value of which is not generally
known or recognized as standard practice, whether or not the underlying details are in the
public domain. Proprietary Information includes, without limitation:
(i) Information or materials which relate to the Company’s trade secrets,
manufacturing, methods, machines, articles of manufacture, compositions, inventions,
engineering services, technological developments, know-how, purchasing, accounting,
merchandising or licensing;
(ii) Software in various stages of development (source code, object code,
documentation, diagrams, flow charts), designs, drawings, specifications, models,
data and customer information; and
(iii) Any information of the type described above which the Company obtained
from another party and which the Company treats as proprietary or designates as
confidential, whether or not owned or developed by the Company.
(b) Cooperation. Fail to furnish such information and render such assistance and
cooperation as may reasonably be requested in connection with any litigation or legal
proceedings concerning the Company (other than any legal proceedings concerning Grantee’s
employment) provided the Company agrees to pay or reimburse Grantee for all reasonable
expenses incurred in cooperating with such requests.
(c) Non-Disparagement. Disparage the Company or their respective officers, directors
or employees.
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The Grantee and the Company consider the commitments contained above to be reasonable for the
purpose of preserving the Company’s goodwill, proprietary rights, trade secrets, valuable
confidential business interests, relationships with specific prospective and existing customers and
going concern value, and to protect the Company’s business opportunities, markets and trade areas.
If a final judicial determination is made by a court having jurisdiction that the time or territory
or scope of restricted activities or any other commitment contained in this Section 10 is an
unenforceable restriction on the activities of Grantee, the provisions of this Agreement will not
be rendered void but will be deemed amended to apply as to such maximum time, restricted activities
and territory and to such other extent as the court may determine or indicate to be reasonable.
Alternatively, if the court finds that any commitment contained in this Section 10 is
unenforceable, and the commitment cannot be amended so as to make it enforceable, that finding
shall not affect the enforceability of any of the other commitments contained here. In addition,
without limiting the generality of the preceding or the Company’s remedies for Grantee’s breach of
any of these commitments, upon Grantee’s material breach of any of these commitments, all shares of
Restricted Stock which have not at the time of breach been freed from restrictions and vested will
automatically be forfeited and returned to the Company.
11. Change in Control. In the event of a Change in Control as defined in the Employment
Agreement, the Restricted Stock will no longer be subject to any restrictions and will vest. In
addition, in that circumstance, the Committee as constituted before the Change in Control may, in
its sole discretion:
(a) Purchase. Provide for the purchase of the shares of Restricted Stock by the
Company, at the Grantee’s request, for an amount of cash equal to the value of the shares
immediately prior to the Change in Control; or
(b) Adjust. Adjust the shares, at the Grantee’s request, as the Committee deems
appropriate to reflect the Change in Control.
12. Arbitration. Grantee and the Company agree that, except with respect to the enforcement
of the Company’s rights under Section 10 of this Agreement, any disagreement dispute, controversy,
or claim arising out of or relating to this Agreement, its interpretation, or validity, or the
terms and conditions of Grantee’s employment (including but not limited to the termination of that
employment), will be settled exclusively and finally by arbitration irrespective of its magnitude,
the amount in controversy, or the nature of the relief sought.
(a) Rules. The arbitration shall be conducted in accordance with the Employment
Arbitration Rules (the “Arbitration Rules”) of the American Arbitration Association (the
“AAA”) (the terms of which then in effect are incorporated here).
(b) Arbitrator. The arbitral tribunal shall consist of one arbitrator skilled in
arbitration of executive employment matters. The parties to the arbitration shall jointly
directly appoint the arbitrator within thirty (30) days of initiation of the arbitration. If
the parties fail to appoint the arbitrator as provided above, the arbitrator shall be
appointed by the AAA as provided in the Arbitration Rules and shall be a person who has had
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substantial experience in executive employment matters. The Company shall pay all of
the fees, if any, and expenses of the arbitrator and the arbitration.
(c) Location. The arbitration shall be conducted in the Southeastern Michigan area or
in such other city in the United States of America as the parties to the dispute may
designate by mutual written consent.
(d) Procedure. At any oral hearing of evidence in connection with the arbitration,
each party or its legal counsel shall have the right to examine its witnesses and to
cross-examine the witnesses of any opposing party. No evidence of any witness may be
presented in any form unless the opposing party or parties has the opportunity to
cross-examine the witness, except under extraordinary circumstances where the arbitrator
determines that the interests of justice require a different procedure.
(e) Decision. Any decision or award of the arbitrator shall be final and binding upon
the parties to the arbitration proceeding. The parties agree that the arbitral award may be
enforced against the parties to the arbitration proceeding or their assets wherever they may
be found and that a judgment upon the arbitral award may be entered in any court having
jurisdiction.
(f) Power. Nothing contained here shall be deemed to give the arbitral tribunal any
authority, power, or right to alter, change, amend, modify, add to, or subtract from any of
the provisions of this Agreement.
The provisions of this Section shall survive the termination or expiration of this Agreement,
shall be binding upon the Company’s and Grantee’s respective successors, heirs, personal
representatives, designated beneficiaries and any other person asserting a claim described above,
and may not be modified without the consent of the Company. To the extent arbitration is required,
no person asserting a claim has the right to resort to any federal, state or local court or
administrative agency concerning the claim unless expressly provided by federal statute, and the
decision of the arbitrator shall be a complete defense to any action or proceeding instituted in
any tribunal or agency with respect to any dispute, unless precluded by federal statute.
13. Governing Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of Michigan.
14. Binding Effect and Amendment. This Agreement is the entire agreement between the parties
and will be binding upon, and will inure to the benefit of, the parties to this Agreement and their
respective heirs, successors, and assigns, and may be modified only by a writing signed by the
parties.
15. Remedies. Grantee acknowledges that any breach of the promises in Section 10 of this
Agreement would cause the Company irreparable damage and therefore agrees that, in the event of a
breach of one or more of those commitments, the Company shall be entitled to preliminary and
permanent injunctive relief in addition to any direct, incidental, and consequential damages,
including lost profits, arising from that breach.
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16. Effective Date. The grant of the Restricted Stock under this Agreement will be effective
as of the Grant Date set forth above.
17. Agreement Controls. The Plan is incorporated by reference into this Agreement.
Capitalized terms not defined in this Agreement have those meanings provided in the Plan or in the
Employment Agreement. In the event of any conflict between the terms of this Agreement and the
terms of the Plan, the provisions of this Agreement control as long as such provisions do not
violate any law, change the character or effect of the Plan or the Restricted Stock under federal
or state, tax or securities law, or exceed the Committee’s authority under the Plan. In that case,
the terms of the Plan shall control. In the event of any conflict between the terms of this
Agreement and the Employment Agreement, the provisions of the Employment Agreement control as long
as such provisions do not violate any law, change the character or effect of the Plan or the
Restricted Stock under federal or state, tax or securities law, or exceed the Committee’s authority
under the Plan.
| KAYDON CORPORATION |
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| By: | /s/ Xxxx X. Xxxxxx | |||
| Its: | V.P. Administration | |||
| GRANTEE |
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| /s/ Xxxxx X’Xxxxx | ||||
| XXXXX X’XXXXX | ||||
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