Exhibit 10.26
HILB, XXXXX AND XXXXXXXX COMPANY
RESTRICTED STOCK AGREEMENT
THIS RESTRICTED STOCK AGREEMENT, dated as of this 11th day of February,
2002, between Hilb, Xxxxx and Xxxxxxxx Company, a Virginia corporation ("the
Company"), and _______________ (the "Employee"), is made pursuant and subject to
the provisions of the Company's 2000 Stock Incentive Plan, as amended, which is
incorporated herein by reference, and any future amendments thereto (the
"Plan"), a copy of which is attached. All terms used herein that are defined in
the Plan shall have the same meanings given them in the Plan.
1. AWARD OF RESTRICTED STOCK. The Company hereby awards to the
Employee, subject to the terms and conditions of the Plan and the provisions of
this Agreement, ______ shares of Common Stock of the Company (the "Restricted
Stock").
2. TERMS AND CONDITIONS. The award of Restricted Stock hereunder is
subject to the following terms and conditions:
(a) CONTINGENT VESTING. The award of Restricted Stock to
Employee is intended to encourage Employee to cause the operating earnings of
Company to grow by at least 10% per calendar year. At each of the vesting dates
set forth in paragraph 2(b), Restricted Stock will be eligible to vest only if
the Company achieves a 10% annual growth in fully diluted earnings per share
based on Operating Income in at least one of the two preceding calendar years.
If the earnings growth requirement has not been met at any of the vesting dates
set forth in paragraph 2(b), all of the Restricted Shares eligible for vesting
on that date shall be cancelled.
(b) RESTRICTED PERIOD. Except as provided in paragraphs
2(a) and 3, the Restricted Stock shall vest and become nonforfeitable in
accordance with the schedule set forth below:
10% Percent of
DATE Earnings Growth Requirement AWARD VESTED
---- ------------
February 11, 2004 2003 vs. 2002 25%
or
2002 vs. 2001
February 11, 2005 2004 vs. 2003 50%
or
2003 vs. 2002
February 11, 2006 2005 vs. 2004 75%
or
2004 vs. 2003
February 11, 2007 2006 vs. 2005 100%
or
2005 vs. 2004
The period from the date hereof until the shares of Restricted Stock
have become 100% vested shall be referred to as the "Restricted Period."
(c) ISSUANCE OF CERTIFICATES; RESTRICTIVE LEGEND. The stock
certificate(s) evidencing the Restricted Stock shall be issued and registered on
the Company's books and records in the name of the Employee as soon as
practicable following the date of this Agreement. The Company shall retain
physical possession and custody of each stock certificate representing the
Restricted Stock until such time as the Restricted Stock becomes vested in
accordance with paragraph 2(b) above. The Employee will deliver to the Company a
stock power, endorsed in blank, with respect to each award of Restricted Stock.
Each stock certificate shall bear a restrictive legend in substantially the
following form:
The shares represented by this certificate are
restricted and may be transferred only in accordance with the
Restricted Stock Agreement
between Hilb, Xxxxx and Xxxxxxxx Company and _______________,
dated February 11, 2002.
Upon the written request of the Employee following the vesting of any portion of
the shares of Restricted Stock prior to any event of forfeiture under paragraph
3, the Company will promptly issue a stock certificate, without such restrictive
legend, with respect to the vested portion of the shares of the Restricted Stock
registered on the Company's books and records in the name of the Employee.
Following the expiration of the Restricted Period, the Company will promptly
issue a stock certificate, without such restrictive legend, for any shares of
Restricted Stock that have vested prior to any event of forfeiture under
paragraph 3 and have not been reissued without a restrictive legend as provided
in the preceding sentence.
(d) TRANSFERABILITY. During the Restricted Period, the
Employee shall not sell, assign, transfer, pledge, exchange, hypothecate, or
otherwise dispose of unvested Restricted Stock. Upon receipt by the Employee of
stock certificate(s) representing vested shares without a restrictive legend
pursuant to paragraph 2(c) above, the Employee may hold or dispose of the shares
represented by such certificate(s), subject to compliance with (i) the terms and
conditions of the Plan and this Agreement and (ii) applicable securities laws of
the United States of America and the Commonwealth of Virginia.
(e) SHAREHOLDER RIGHTS. Prior to any forfeiture of the shares
of Restricted Stock and while the shares are Restricted Stock, the Employee
shall, subject to the terms of this Agreement and the restrictions of the Plan,
have all rights of a shareholder with respect to the shares of Restricted Stock
awarded hereunder, including the right to receive dividends and other
distributions as and when declared by the Board of Directors of the Company and
the right to vote the shares of Restricted Stock.
(f) TAX WITHHOLDING. The Company shall have the right to
retain and withhold from any award of the Restricted Stock, the amount of taxes
required by any government to be withheld or otherwise deducted and paid with
respect to such award. At its discretion, the Company may require the Employee
receiving shares of Restricted Stock to pay or otherwise reimburse the Company
in cash for any such taxes required to be withheld by the Company and withhold
any distribution in whole or in part until the Company is so paid or reimbursed.
In lieu thereof, the Company shall have the unrestricted right to withhold, from
any other cash amounts due (or to become due) from the Company to the Employee,
an amount equal to such taxes required to be withheld by the Company to
reimburse the Company for any such taxes (or retain and withhold a number of
shares of vested Restricted Stock, having a market value not less than the
amount of such taxes, and cancel in whole or in part any such shares so
withheld, in order to reimburse the Company for any such taxes).
3. DEATH; DISABILITY; RETIREMENT; TERMINATION OF EMPLOYMENT. The shares
of Restricted Stock not yet vested shall become 100% vested and transferable in
the event that the Employee dies or becomes permanently and total disabled
(within the meaning of Section 22(e)(3) of the Internal Revenue Code) while
employed by the Company or an Affiliate during the Restricted Period. Upon
attaining age 62 with 10 consecutive years of service with the Company or an
Affiliate, or in any other circumstance approved by the Committee in its sole
discretion, the shares of Restricted Stock shall become 100% vested and
transferable. In all events other than those previously addressed in this
paragraph, if the Employee ceases to be an employee of the Company or an
Affiliate, the Employee shall be vested only as to that percentage of shares of
Restricted Stock which are vested at the time of the termination of his
employment and the Employee shall forfeit the right to the shares of Restricted
Stock which are not yet vested on the termination date.
4. NO RIGHT TO CONTINUED EMPLOYMENT. This Agreement does not confer
upon the Employee any right with respect to continuance of employment by the
Company or an Affiliate, nor shall it interfere in any way with the right of the
Company or an Affiliate to terminate his or her employment at any time.
5. CHANGE OF CONTROL OR CAPITAL STRUCTURE. Subject to any required
action by the shareholders of the Company, the number of shares of Restricted
Stock covered by this award shall be proportionately adjusted and the terms of
the restrictions on such shares shall be adjusted as the Committee shall
determine to be equitably required for any increase or decrease in the number of
issued and outstanding shares of Common Stock of the Company resulting from any
stock dividend (but only on the Common Stock), stock split, subdivision,
combination, reclassification, recapitalization or general issuance to the
holders of Common Stock of rights to purchase Common Stock at substantially
below its then fair market value or any change in the number of shares of Common
Stock outstanding effected without receipt of cash, property, labor or services
by the Company or for any spin-off or other distribution of assets to
shareholders.
In the event of a Change of Control, this award of Restricted Stock
shall immediately vest pursuant to the provisions of Section XIII(3) of the
Plan. In the event of a change in the Common Stock of the Company as presently
constituted, which is limited to a change of all or part of its authorized
shares without par value into the same number of shares with a par value, or any
subsequent change into the same number of shares with a different par value, the
shares resulting from any such change shall be deemed to be the Common Stock
within the meaning of the Plan.
The award of Restricted Stock pursuant to the Plan shall not affect in
any way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes of its capital or business
structure or to merge or to consolidate or to dissolve, liquidate, sell or
transfer all or any part of its business or assets.
6. GOVERNING LAW. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the Commonwealth of Virginia, except to
the extent that federal law shall be deemed to apply.
7. CONFLICTS. In the event of any conflict between the provisions of
the Plan as in effect on the date hereof and the provisions of this Agreement,
the provisions of the Plan shall govern. All references herein to the Plan shall
mean the Plan as in effect on the date hereof.
8. EMPLOYEE BOUND BY PLAN. The Employee hereby acknowledges receipt of
a copy of the Plan and agrees to be bound by all the terms and provisions
thereof.
9. BINDING EFFECT. Subject to the limitations stated herein and in the
Plan, this Agreement shall be binding upon and inure to the benefit of the
legatees, distributees, and personal representatives of the Employee and the
successors of the Company.
10. FORFEITURE OF CERTAIN GAINS.
(a) TERMINATION FOR CAUSE. If Employee's employment is
terminated for "Cause" within one year of any vesting of Restricted Stock
herein, the Employee shall pay to the Company an amount equal to the Fair Market
Value of such Restricted Stock on the date of vesting without regard to any
subsequent market price increase or decrease. For purposes of this paragraph,
"Cause" shall have the meaning ascribed to it in any employment agreement
between the Employee and the Company that is in effect at the time of
termination and, if no such agreement exists, it shall mean:
(i) the willful and continued failure of the
Employee to perform substantially the Employee's duties with the Company or one
of its affiliates (other than any such failure resulting from incapacity due to
physical or mental illness), after a written demand for substantial performance
is delivered to the Employee by the Company which specifically identifies the
manner in which the Company believes that the Employee has not substantially
performed the Employee's duties, or
(ii) the willful engaging by the Employee in
illegal conduct or gross misconduct which is materially and demonstrably
injurious to the Company.
(b) FORFEITURE IF EMPLOYEE ENGAGES IN CERTAIN ACTIVITIES. If
Employee engages in any activity in competition with any activity of the
Company, or inimical, contrary or harmful to the interests of the Company,
including but not limited to (i) accepting employment with or serving as a
consultant advisor or in any other capacity to an employer that is in
competition with or acting against the interests of the Company, (ii) disclosing
or misusing any confidential information or material concerning the Company or
(iii) participating in any hostile takeover attempt, then (1) any unvested
Restricted Stock shall be forfeited and cancelled and (2) the Employee shall pay
to the Company an amount equal to the Fair Market Value on the date of vesting,
without regard to any subsequent market price increase or decrease, of any
Restricted Stock that vested within one year of the date such activity began.
(c) RIGHT OF SET-OFF. Employee hereby consents to a deduction
from any amounts owed by the Company to Employee from time to time (including
amounts owed as wages or other compensation, fringe benefits or vacation pay, to
the extent of any amounts Employee owes the Company under paragraph 10(a) and
(b). Whether or not the Company elects to make any set-off in whole or in part,
if Company does not recover by means of set-off the full amount owed by
Employee under paragraphs 10(a) and (b), Employee agrees to immediately pay the
unpaid balance to the Company.
IN WITNESS WHEREOF, the Company has caused this Agreement to be signed
by a duly authorized Employee, and the Employee has affixed his or her signature
hereto.
HILB, XXXXX AND XXXXXXXX COMPANY
By:
------------------------------------
Title:
----------------------------------
[Name of officer]
----------------------------------------
Signature
FOR VALUE RECEIVED I, _______________, hereby sell, assign and transfer unto
HILB, XXXXX AND XXXXXXXX COMPANY, _________ (___) shares of the Common Stock of
Hilb, Xxxxx and Xxxxxxxx Company standing in my name on the books of said
Corporation represented by Certificate No. _____ herewith and do hereby
irrevocably constitute and appoint XXXXXX X. XXXXX, or his designee or
successor, attorney to transfer the said stock on the books of the within named
Company with full power of substitution in the premises.
Dated __________, 200_
-----------------------------
[Signature - exact name as it
appears on certificate(s)]
-----------------------------
RESTRICTED STOCK OPTIONS
FOR NAMED EXECUTIVE EMPLOYEES
GRANT DATE OPTIONS GRANTED
---------- ---------------
Xxxxxxx X. Xxxxx 02/11/2002 3,000
Xxxxxxx X. Xxxxxx 02/11/2002 4,000
Xxxx X. XxXxxxx 02/11/2002 4,000
Xxxxxx X. Xxxxx 02/11/2002 10,000
Xxxxxx X. Xxxxxxx, III 02/11/2002 6,000
