RESTRICTED STOCK AGREEMENT
EXHIBIT
10.3
THIS
RESTRICTED STOCK AGREEMENT (the “Agreement”),
is
made, effective as of the 16th day of September, 2008 (hereinafter the
“Date
of Grant”),
between United Fuel & Energy Corporation, a Nevada corporation (the
“Company”),
and
Xxxxxxx X. Xxxxxxx (the “Participant”).
RECITALS:
WHEREAS,
the Company has adopted the United Fuel & Energy Corporation 2005 Equity
Incentive Plan (the “Plan”),
pursuant to which awards of shares of the Company’s common stock, par value
$0.001 per share (the “Common
Stock”),
may
be granted; and
WHEREAS,
the Board of Directors of the Company has determined that it is in the best
interests of the Company and its stockholders to grant to the Participant an
award of shares of Common Stock as a grant of Restricted Stock under the Plan,
subject to the terms set forth herein.
NOW
THEREFORE, for and in consideration of the premises and the covenants of the
parties contained in this Agreement, and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties hereto,
for themselves, their successors and assigns, hereby agree as
follows:
1. Grant
of Restricted Stock.
The Company hereby grants to the Participant on the Date of Grant 150,000 shares
of Common Stock (the “Award”)
on the
terms and conditions set forth in this Agreement and as otherwise provided
in
the Plan. The Award shall vest in accordance with Section 3
hereof.
2. Incorporation
by Reference, Etc.
The
provisions of the Plan are hereby incorporated herein by reference. Except
as
otherwise expressly set forth herein, this Agreement shall be construed in
accordance with the provisions of the Plan and any capitalized terms not
otherwise defined in this Agreement shall have the definitions set forth in
the
Plan. The Compensation
Committee of the Board of Directors of the Company (the “Committee”)
shall
have final authority to interpret and construe the Plan and this Agreement
and
to make any and all determinations under them, and its decision shall be final,
binding and conclusive upon the Participant and his legal representative in
respect of any questions arising under the Plan or this Agreement.
3. Terms
and Conditions.
(a) Restrictions.
The shares of Common Stock comprising the Award granted hereunder (the
“Award
Shares”)
may
not be sold, pledged or otherwise transferred (other than by will or the laws
of
decent and distribution or as otherwise permitted by the Committee) and may
not
be subject to lien, garnishment, attachment or other legal
process.
(b) Vesting.
The Award shall vest in twelve equal quarterly installments on the last day
of
each calendar quarter beginning on December 31, 2008. In
order
for Award Shares to vest under
this
Agreement, the Participant must be continuously serving as an employee of the
Company from the Date of Grant through the date of vesting. As soon as
practicable following each vesting date, the Company shall deliver to the
Participant a stock certificate representing the vested Award Shares.
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(c) Escrow
of Shares.
During
the period of time between the Date of Grant and the earlier of each vesting
date or the date on which any Award Shares are forfeited (the “Restriction
Period”),
the
Award Shares shall be registered in the name of the Participant and held in
escrow by the Company, and the Participant hereby agrees to provide one or
more
stock powers in substantially the form attached hereto as Exhibit
A
endorsed
by the Participant in blank corresponding to each stock certificate representing
the Award Shares. Upon vesting of any Award Shares, a certificate representing
the vested Award Shares shall be delivered to the Participant as promptly as
practicable following such vesting date and the Company will destroy the stock
power corresponding to the certificate representing such vested Award Shares.
(d) Effect
of Termination of Services as an Employee.
If the
Participant’s service as an employee of the Company is terminated (i) by the
Company for Cause (as the term “Cause” is defined in that certain Employment
Agreement between the Company and the Participant dated the date hereof (the
“Employment
Agreement”)),
or
(ii) by the Participant without Good Reason (as the term “Good Reason” is
defined in the Employment Agreement), then any unvested Award Shares shall
be
immediately forfeited without further consideration to the Participant and
the
Company may use the stock powers corresponding to each stock certificate
representing all unvested Award Shares to transfer record ownership of all
such
unvested Award Shares from the Participant to the Company or third party, in
the
Company’s sole discretion. If the Participant’s service as an employee of the
Company is terminated (i) by the Company without Cause (as the term “Cause” is
defined in the Employment Agreement), (ii) by the Participant for Good Reason
(as the term “Good Reason” is defined in the Employment Agreement), (iii) upon
the Participant’s death, or (iv) upon the Participant’s Disability (as the term
“Disability” is defined in the Employment Agreement), then any unvested Award
Shares shall immediately vest and the Company shall deliver to the Participant
(or, in the event of Participant’s death, the Participant’s estate) the stock
certificates representing the vested Award Shares.
(e) Section
83(b) Election.
Participant understands that, under Section 83 of the Internal Revenue Code
(the
“Code”),
the
difference between the fair market value of the Award Shares as of the Date
of
Grant and their fair market value at the time any forfeiture restrictions
applicable to such shares lapse may be reportable as ordinary income at that
time. Participant understands that Participant may elect to be taxed at the
time
the Award is granted hereunder to the extent of the full fair market value
thereof as of the Date of Grant rather than when and as such Award Shares cease
to be subject to forfeiture, by filing an election under Section 83(b) of the
Code with the Internal Revenue Service within 30 days after the Date of Grant.
If it is likely that the fair market value of the Award Shares at the time
any
forfeiture restrictions lapse will exceed the fair market value thereof as
of
the Date of Grant, the election may avoid adverse tax consequences in the
future. Participant understands that the failure to make this filing within
said
30-day period will result in the recognition of ordinary income by Participant
(in the event the fair market value of the Award Shares increases after the
Date
of Grant) as the forfeiture restrictions lapse. PARTICIPANT ACKNOWLEDGES THAT
IT
IS PARTICIPANT’S SOLE RESPONSIBILITY, AND NOT THE COMPANY’S, TO FILE A TIMELY
ELECTION UNDER SECTION 83(B), EVEN IF PARTICIPANT REQUESTS THE COMPANY OR ITS
REPRESENTATIVE TO MAKE THIS FILING ON PARTICIPANT’S BEHALF.
(f) Rights
as a Stockholder.
The
Participant is entitled to receive all dividends and other distributions made
with respect to the Award Shares registered in his or her name and is entitled
to vote or execute proxies with respect to such Award Shares registered in
his
or her name, unless and until the Award Shares are forfeited pursuant to
Section
3(d)
above.
Upon and following the vesting date, the Participant shall be the record owner
of the Award Shares unless and until such shares are sold or otherwise disposed
of, and as record owner shall be entitled to all rights of a common stockholder
of the Company. Prior to the vesting date, the Participant shall not be
deemed to be the owner of the Award Shares.
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(g) Compliance
With Securities Laws; Internal Revenue Code Section 409A.
The
Company will not be required to issue any shares of Common Stock pursuant to
this Agreement if, in the opinion of counsel for the Company, such issuance
would violate the Securities Act of 1933, as amended, or any other applicable
federal or state securities laws or regulations. Prior to the issuance of any
shares pursuant to this Agreement, the Company may require that the Participant
(or the Participant’s legal representative upon the Participant’s death or
disability) enter into such written representations, warranties and agreements
as the Company may reasonably request in order to comply with applicable
securities laws or with this Agreement. The Company may also delay issuance
of
shares of Common Stock hereunder to the extent set forth in Treasury Regulation
Section 1.409A-2(b)(7).
4. Miscellaneous.
(a) Notices.
All
notices, demands and other communications provided for or permitted hereunder
shall be made in writing and shall be by registered or certified first-class
mail, return receipt requested, telecopier, courier service or personal
delivery. All
such
notices, demands and other communications shall be deemed to have been duly
given when delivered by hand, if personally delivered; when delivered by
courier, if delivered by commercial courier service; five (5) business days
after being deposited in the mail, postage prepaid, if mailed; and when receipt
is mechanically acknowledged, if telecopied.
(b) Severability.
The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement,
and each other provision of this Agreement shall be severable and enforceable
to
the extent permitted by law.
(c) No
Rights to Continued Service.
Nothing
contained in this Agreement shall be construed as giving the Participant any
right to be retained, in any position, as an employee, consultant or director
of
the Company or its Subsidiaries or shall interfere with or restrict in any
way
the right of the Company or its Subsidiaries, which are hereby expressly
reserved, to remove, terminate or discharge the Participant at any time for
any
reason whatsoever.
(d) Bound
by Plan.
By
signing this Agreement, the Participant acknowledges that he has received a
copy
of the Plan and has had an opportunity to review the Plan and agrees to be
bound
by all the terms and provisions of the Plan.
(e) Successors.
The
terms of this Agreement shall be binding upon and inure to the benefit of the
Company and its successors and assigns, and of the Participant and the
beneficiaries, executors, administrators, heirs and successors of the
Participant.
(f) Entire
Agreement.
This
Agreement and the Plan contain the entire agreement and understanding of the
parties hereto with respect to the subject matter contained herein and
supersedes all prior communications, representations and negotiations in respect
thereto. No change, modification or waiver of any provision of this Agreement
shall be valid unless the same is in writing and signed by the parties hereto.
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(g) Governing
Law.
This
Agreement shall be construed and interpreted in accordance with the laws of
the
State of Nevada without regard to principles of conflicts of law thereof, or
principals of conflicts of laws of any other jurisdiction that could cause
the
application of the laws of any jurisdiction other than the State of
Nevada.
(h) Signature
in Counterparts.
This
Agreement may be signed in counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the
same
instrument.
(i) Electronic
Signatures.
Delivery of a copy of this Agreement bearing an original signature by facsimile
transmission (whether directly from one facsimile device to another by means
of
a dial-up connection or whether mediated by the worldwide web), by electronic
mail in “portable document format” (“.pdf”) form, or by any other electronic
means intended to preserve the original graphic and pictorial appearance of
a
document, will have the same effect as physical delivery of the paper document
bearing the original signature. “Originally signed” or “original signature”
means or refers to a signature that has not been mechanically or electronically
reproduced.
[Remainder
of page intentionally left blank; signature page to
follow]
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IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day
first written above.
|
UNITED
FUEL & ENERGY CORPORATION
|
||
| |
|
|
| By: | /s/ Xxxxx X. Xxxxxxx | |
|
Xxxxx X. Xxxxxxx |
||
| Chief Executive Officer | ||
| /s/ Xxxxxxx X. Xxxxxxx | ||
|
XXXXXXX X. XXXXXXX |
||
[Signature
page to Restricted Stock Agreement]
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