1
EXHIBIT 10.42
RESTRICTED STOCK AWARD AGREEMENT
under the
RENAL CARE GROUP, INC.
1996 STOCK INCENTIVE PLAN
Grantee: Xxx X. Xxxxxx, Xx.
Number of Shares: 3,500
Effective Date of Grant: January 25, 1999
1. Grant of Shares. Renal Care Group, Inc. (the "Corporation") hereby
grants to the Grantee named above (the "Grantee"), under the Renal Care Group,
Inc. Amended and Restated 1996 Stock Incentive Plan (the "Plan"), as additional
compensation for services rendered, and subject to the restrictions and the
other terms and conditions set forth in this agreement (this "Agreement"), the
number of shares indicated above of the Corporation's $0.01 par value common
stock (the "Shares"). Capitalized terms used herein and not otherwise defined
shall have the meanings assigned such terms in the Plan.
2. Restrictions. The Shares may not be sold, transferred, exchanged,
assigned, pledged, hypothecated or otherwise encumbered unless and until such
restriction has expired as provided in Section 3 hereof. Any Shares as to which
such restriction has not yet expired are referred to herein as the "Restricted
Shares."
If the Grantee's employment with the Corporation or any Subsidiary
terminates for any reason other than as set forth in any of paragraphs (b)
through (d) of Section 3 hereof, then the Grantee shall forfeit all of the
Grantee's right, title and interest in and to the Restricted Shares as of the
date of employment termination.
The restrictions imposed under this Section shall apply to all shares of
capital stock or other securities that may be issued with respect to Restricted
Shares hereunder in connection with any merger, reorganization, consolidation,
recapitalization, stock dividend or other change in corporate structure
affecting the common stock of the Corporation.
3. Expiration and Termination of Restrictions. The restrictions imposed
under Section 2 will expire on the earliest to occur of the following:
(a) As to the following numbers of Restricted Shares
awarded hereunder (adjusted proportionately in the event of any change
in the total numbers of Restricted Shares) on the following respective
dates:
2
Date of Termination
Number of Shares of Restrictions
---------------- -------------------
3,500 January 25, 2004
(b) On the first day of the calendar month next
following the termination of the Grantee's employment with the
Corporation or any Subsidiary because of his or her death or
Disability; or
(c) On the date the Grantee's employment with the
Corporation or any Subsidiary is terminated either (i) by the Company
or any Subsidiary without "Cause," as defined in Appendix A, or (ii) by
the Grantee for "Good Reason," as defined in Appendix A; or
(d) On the date specified by the Committee as it may
deem appropriate in connection with a termination of the Grantee's
employment with the Corporation or any Subsidiary in a manner not
covered by paragraph (c) of this Section; or
(e) On the date of any acceleration of vesting in
accordance with Article 9 of the Plan.
4. Delivery of Shares. The Shares will be issued in the name of the
Grantee as Restricted Stock and will be held by the Corporation during the
Restricted Period. Stock certificates shall be delivered as soon as practicable
after vesting of the Shares, but may be postponed for such period as may be
required for the Corporation with reasonable diligence to comply if deemed
advisable by the Corporation, with registration requirements under the
Securities Act, listing requirements under the rules of any stock exchange, and
requirements under any other law or regulation applicable to the issuance or
transfer of the Shares.
5. Voting and Dividend Rights. The Grantee, as beneficial owner of the
Shares, shall have full voting and dividend rights with respect to the Shares
during the Restricted Period.
6. Restrictions on Transfer and Pledge. The Restricted Shares may not be
pledged, encumbered, or hypothecated to or in favor of any party other than the
Corporation or a Subsidiary, or be subject to any lien, obligation, or liability
of the Grantee to any other party other than the Corporation or a Subsidiary.
The Restricted Shares are not assignable or transferable by the Grantee other
than by will or the laws of descent and distribution.
7. No Right of Continued Employment. Nothing in this Agreement shall
interfere with or limit in any way the right of the Corporation or any
Subsidiary to terminate the Grantee's employment at any time, or confer upon the
Grantee any right to continue in the employ of the Corporation or any
Subsidiary.
-2-
3
8. Payment of Taxes. The Grantee will, no later than the date as of which
any amount related to the Shares first becomes includable in the Grantee's gross
income for federal income tax purposes, pay to the Corporation, or make other
arrangements satisfactory to the Committee regarding payment of, any federal,
state and local taxes of any kind required by law to be withheld with respect to
such amount. The obligations of the Corporation under this Agreement will be
conditional on such payment or arrangements, and the Corporation, and, where
applicable, its Subsidiaries will, to the extent permitted by law, have the
right to deduct any such taxes from any payment of any kind otherwise due to the
Grantee.
9. Amendment. This Agreement may not be amended except in writing, signed
by the parties hereto, provided that the Plan may be amended in the manner
provided in the Plan.
10. Plan Controls. The terms contained in the Plan are incorporated into
and made a part of this Agreement and this Agreement shall be governed by and
construed in accordance with the Plan. In the event of any actual or alleged
conflict between the provisions of the Plan and the provisions of this
Agreement, the provisions of the Plan shall be controlling and determinative.
11. Successors. This Agreement shall be binding upon any successor of the
Corporation, in accordance with the terms of this Agreement and the Plan.
12. Severability. If any one or more of the provisions contained in this
Agreement are invalid, illegal or unenforceable, the other provisions of this
Agreement will be construed and enforced as if the invalid, illegal or
unenforceable provision had never been included.
13. Notice. Notices and communications under this Agreement must be in
writing and either personally delivered or sent by registered or certified
United States mail, return receipt requested, postage prepaid. Notices to the
Corporation must be addressed to:
Renal Care Group, Inc.
0000 Xxxx Xxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
Attn: Chief Financial Officer and General Counsel
or any other address designated by the Corporation in a written notice to the
Grantee. Notices to the Grantee will be directed to the address of the Grantee
then currently on file with the Corporation, or at any other address given by
the Grantee in a written notice to the Corporation.
[the remainder of this page intentionally left blank, signatures follow]
-3-
4
IN WITNESS WHEREOF, Renal Care Group, Inc., acting by and through its
duly authorized officers, has caused this Agreement to be executed, and the
Grantee has executed this Agreement, all as of the day and year first above
written.
Renal Care Group, Inc.
By: /s/ Xxxxxx Xxxxx
------------------------
Title:Executive Vice President
I hereby accept the above Shares grant in accordance with and subject to
the terms and conditions set forth above.
I agree that any shares of common stock received by me hereunder will not
be sold or otherwise disposed of by me except in a manner in compliance with
applicable securities laws.
GRANTEE:
/s/ Xxx X. Xxxxxx
--------------------
Print Name: Xxx X. Xxxxxx
-4-
5
APPENDIX A
1. For purposes of this Restricted Stock Award Agreement, "Cause" shall
mean any one of the following:
(i) the willful and continued failure of the Grantee
to substantially perform his or her duties with the Company or one of its
affiliates (other than any such failure resulting from incapacity due to
Disability, and specifically excluding any failure by the Grantee, after
reasonable efforts, to meet performance expectations), after a written demand
for substantial performance is delivered to the Grantee by the Board or the
Chief Executive Officer of the Company which specifically identifies the manner
in which the Board or Chief Executive Officer believes that the Grantee has not
substantially performed the Grantee's duties, or
(ii) the willful engaging by the Grantee in illegal conduct
or gross misconduct which is materially and demonstrably injurious to the
Company.
For purposes of this provision, no act or failure to act, on the part of the
Grantee, shall be considered "willful" unless it is done, or omitted to be done,
by the Grantee in bad faith or without reasonable belief that the Grantee's
action or omission was in the best interests of the Company. Any act, or failure
to act, based upon authority given pursuant to a resolution duly adopted by the
Board or upon the instructions of the Chief Executive Officer or a senior
officer of the Company or based upon the advice of counsel for the Company shall
be conclusively presumed to be done, or omitted to be done, by the Grantee in
good faith and in the best interests of the Company. The cessation of employment
of the Grantee shall not be deemed to be for Cause unless and until there shall
have been delivered to the Grantee a copy of a resolution duly adopted by the
affirmative vote of not less than three-quarters of the entire membership of the
Board at a meeting of the Board called and held for such purpose (after
reasonable notice is provided to the Grantee and the Grantee is given an
opportunity, together with counsel, to be heard before the Board), finding that,
in the good faith opinion of the Board, the Grantee is guilty of the conduct
described in subparagraph (i) or (ii) above, and specifying the particulars
thereof in detail.
2. For purposes of this Restricted Stock Award Agreement, "Good Reason"
shall mean any of the following: (i) without the express written consent of the
Grantee, a material diminution of his position, duties, responsibilities and
status with the Company as in effect as of the Date of Grant, a change in the
Grantee's reporting responsibilities, a material reduction of Grantee's titles
or offices as in effect on the Date of Grant, or the removal of the Grantee
from, or failure to re-elect the Grantee to, any office with the Company that
Grantee served in as of the Date of Grant, except in connection with promotions
to higher office or except in connection with the termination of this Agreement
for Cause; (ii) the reduction of the base compensation of the Grantee; (iii) the
requirement that the Grantee relocate outside of the Nashville, Tennessee
metropolitan area; (iv) the material breach by the Company of any material
provision of any employment agreement or other agreement with the Grantee, which
breach continues uncorrected and uncured for fifteen (15) days after the Grantee
gives notice of such breach to the Company; or (v) the termination of this
Agreement by written notice from the Grantee to the Company during the thirty
(30) day period immediately following the first anniversary of a Change in
Control (as defined below).
6
For purposes of this Restricted Stock Award Agreement, "Change in
Control" means a change in control of the Company of a nature that would be
required to be reported (assuming such event has not been "previously reported")
in response to Item 1(a) of a Current Report on Form 8-K pursuant to Section 13
or 15(d) of the Exchange Act of 0000 (xxx "Xxxxxxxx Xxx"); provided that,
without limitation, a Change in Control shall also be deemed to have occurred at
such time as:
(i) any "person" within the meaning of Section 14(d) of
the Exchange Act, other than the Company; a subsidiary, or any employee benefit
plan(s) sponsored by the Company or any Subsidiary, is or has become the
"beneficial owner," as defined in rule l3d-3 under the Exchange Act, directly or
indirectly, of 25% or more of the combined voting power of the outstanding
securities of the Company ordinarily having the right to vote at the election of
directors, or
(ii) individuals who constitute the Board immediately prior
to any meeting of stockholders (the "Incumbent Board") have ceased for any
reason to constitute at least a majority thereof, provided that any person
becoming a director whose election, or nomination for election by the Company's
stockholders, was approved by a vote of at least three-quarters (3/4) of the
directors comprising the Incumbent Board (either by a specific vote or by
approval of the proxy statement of the Company in which such person is named as
a nominee for director without objection to such nomination) shall be, for
purposes of this Agreement, considered as though such person were a member of
the Incumbent Board; or
(iii) upon approval by the Company's stockholders of a
reorganization, merger, share exchange or consolidation, other than one with
respect to which those persons who were the beneficial owners, immediately prior
to such reorganization, merger, share exchange or consolidation, or outstanding
securities of the Company ordinarily having the right to vote in the election of
directors own, immediately after such transaction, more than 75% of the
outstanding securities of the resulting corporation ordinarily having the right
to vote in the election of directors; or
(iv) upon approval by the Company's stockholders of a
complete liquidation and dissolution of the Company or the sale or other
disposition of all or substantially all of the assets of the Company other than
to a Subsidiary.
The Grantee's right to terminate his employment pursuant to this
Agreement for Good Reason shall not be affected by the Grantee's inability to
satisfactorily perform the duties required by the Grantee's current job
description due to physical or mental limitations or illness. The Grantee's
continued employment shall not constitute consent to, or a waiver of rights with
respect to, any circumstance constituting Good Reason hereunder.
-2-
