THE ST. XXXX COMPANIES, INC.
DEFERRED STOCK GRANT AGREEMENT
Agreement made and entered into this 2nd day of November, 1993,
by and between The St. Xxxx Companies Inc., ("Company") and Xxxx
Xxxxx ("Employee").
In consideration of the mutual promises herein contained, the
parties hereto hereby agree as follows:
1. Grant of Shares Subject to Deferral. The Employee hereby
acknowledges that the Company has on this date and on the
terms and conditions of this Agreement, agreed to issue to the
Employee two thousand (2,000) common shares, without par
value, of the Company as presently constituted, on the dates
and subject to satisfaction of the conditions set forth
herein. The shares which are the subject of this Agreement
shall hereinafter be referred to as the "Deferred Shares". In
the event that, prior to the issuance of any Deferred Shares
which become subject to issuance hereunder, the Company issues
any common shares for less than fair value as determined
reasonably and in good faith by the Board of Directors
(including stock splits and stock dividends but excluding
shares issued to employees of the Company or its subsidiaries
or pursuant to employee benefit plans), the number of Deferred
Shares subject to this Agreement shall, to the extent the
consideration is less than fair value, be adjusted (increased
or decreased) appropriately at the time they are issued
pursuant hereto so as to prevent the equity interest in the
Company represented by unissued Deferred Shares from being
unfairly diluted.
2. Conditions. The Employee hereby agrees that, until the
Deferred Shares are issued, the Employee will not have any
rights of a shareholder with respect to the Deferred Shares
and will not have the right or power to sell, assign,
transfer, pledge, encumber or otherwise alienate, hypothecate
or dispose of any Deferred Shares. Employee does not have the
right to sell, assign or transfer any interest in this
Agreement.
3. Condition Precedent. It is a condition precedent to the
issuance of any Deferred Shares that the Employee be an
employee of the Company or one of its subsidiaries at the
event or on the date set out below for issuance of such
Deferred Shares unless his employment shall have terminated
involuntarily without cause or that he shall have died or
become disabled and while an employee of the Company or one of
its subsidiaries. Unless the Employee's employment shall have
terminated earlier for reasons other than death or disability
or involuntary termination without cause, the Company shall
cause the issuance, fully paid and nonassessable, and delivery
to the Employee of two thousand Deferred Shares duly
registered in the Employee's name upon: 1) his return to the
U.S. from expatriate assignment; 2) involuntary termination
without cause; 3) his death or disability; or 4) April 5,
1996.
4. Termination of Employment. In the event of termination of the
Employee's employment with the Company and all of its
subsidiaries prior to the date/event fixed for the issuance of
Deferred Shares for any cause whatsoever other than death or
disability or involuntary termination without cause, the
Employee shall not be entitled to have issued to him any
unissued Deferred Shares and the reservation of such Deferred
Shares for issuance to the Employee shall terminate without
further obligation to the Employee. In the event the
termination of Employee's employment with the Company and all
of its subsidiaries is involuntary without cause or occurs by
reason of his death or disability, the full number of Deferred
Shares subject to deferral shall, unless previously issued
under paragraph 3 above, be issued immediately to Employee or,
if he is deceased, to his spouse, if he is married, otherwise
to the representative of his estate. The employment of the
Employee shall be considered for purposes of this Agreement to
have been terminated because of disability if, while an
employee of the Company or any of its subsidiaries, he becomes
physically or mentally disabled, whether totally or partially,
so that he is prevented from satisfactorily performing his
duties as an employee for a period of six consecutive months
or for shorter periods aggregating six months in any period of
twelve consecutive months, and as a result his employment with
the Company and all of its subsidiaries is terminated.
An involuntary termination without cause shall mean a Company
(or subsidiary) initiated termination based on a business
decision and unrelated to the Employee's performance and
conduct.
In the event that the Employee is not an employee of the
Company or one of its subsidiaries on the date he becomes
entitled to have Deferred Shares issued to him pursuant
hereto, the Company may, in lieu of issuing Deferred Shares,
elect to pay to him (or his surviving spouse or the
representative of his estate, as the case may be) an amount
equal to the market value on the date of the Deferred Shares
that would have otherwise been issuable to him. The "market
value" of such Deferred Shares shall be the closing price in
the principal United States market for common shares of the
Company on that day, or if the market is closed on the day, on
the next preceding day on which the market was open.
5. Payment in Lieu of Dividends. On the day fixed for the
payment of cash dividends on its common shares while Employee
is employed by the Company or one of its subsidiaries, or if
Employee shall have ceased to be employed by the Company or
one of its subsidiaries because of his death or disability or
involuntary termination without cause, the Company shall pay
to the Employee (or his surviving spouse or the representative
of his estate) an amount equal to any dividends which would
have been paid on any unissued Deferred Shares if they had
been issued and outstanding on the record date of the payment
of that dividend.
6. Payment of Taxes. Employee shall properly remit to the
Company within two weeks of the date of the issuance of
Deferred Shares, or any payment in lieu of dividends with
respect to any Deferred Shares, the amount of all tax and
other withholding for income, employment or other taxes, which
are due in connection with the grant, issuance and delivery of
the Deferred Shares or a payment in lieu of dividends. The
Company or any of its subsidiaries may, at its
option, withhold the amount of any such taxes or other
withholding from Deferred Shares otherwise issuable and any
cash dividend equivalents otherwise payable hereunder or from
other amounts otherwise payable to the Employee. If the
condition precedent to the issuance of Deferred Shares is
satisfied by reason of the Employee's death or disability and
the value of the unissued Deferred Shares would be treated as
income to Employee, his spouse or estate, for the year in
which the condition is satisfied, the Company shall issue a
sufficient number of Deferred Shares based on fair market
value to pay any taxes on account of unissued Deferred Shares.
7. Governing Law. This Agreement and the legal relations between
the parties as to all matters, including without limitation,
matters of validity, interpretation construction, effect,
performance and remedies, will be governed by and construed in
accordance with the internal laws of the State of Minnesota
(without regard to the laws of conflict of any jurisdiction),
the place of incorporation and the principal place of business
of the Company, and the Employee consents to the jurisdiction
of the courts of the State of Minnesota or U.S. Federal courts
sitting in Minnesota for all disputes arising under or
connected with this Agreement.
8. Compliance with Securities Laws. If in the opinion of counsel
of the Employee reasonably acceptable to the Company, it is
necessary for compliance with securities laws of the United
States and/or any state thereof which are applicable to the
proposed sale by the Employee (or his surviving spouse or the
representative of his estate) of any Deferred Shares within 3
years after issuance thereof pursuant to this Agreement, on
receipt of the Employee's request and a copy of his counsel's
opinion, the Company will register the sale of and/or qualify
the Deferred Shares under applicable United States federal
laws and the laws of the state where the sale is to take place
for immediate sale and will maintain that registration and/or
qualification in effect for at least 20 business days;
provided that the Company need not register fewer than 1000
Deferred Shares at one time and need not register any Deferred
Shares more than once; provided further that, on receiving the
Employee's request that it register and/or qualify such
Deferred Shares, the Company may in turn notify the Employee
that it elects instead to purchase the Deferred Shares from
the Employee, which purchase shall take place on delivery to
the Company of the Deferred Shares duly endorsed for transfer
to the Company within seven days after the day on which the
Company notifies the Employee of its election at the closing
price for common shares of the Company in the principal United
States market for common shares of the Company on the day the
Deferred Shares are delivered to the Company or if the market
is closed on that day, that day on the next preceding day on
which the market was open. If the Company unreasonably
refuses or fails to register or qualify Deferred Shares
pursuant hereto at the Employee's request and does not offer
to purchase them by the date scheduled for their delivery to
the Company, the Employee may require the Company to purchase
the Deferred Shares on the terms and conditions set forth for
above for a purchase at the Company's election.
In witness whereof the parties have executed this Agreement as
of the day and year set forth above.
THE ST. XXXX COMPANIES, INC.
By /s/ Xxxxxxx X. Xxxxxxxxxxx /s/ Xxxx Xxxxx
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Xxxxxxx X. Xxxxxxxxxxx Xxxx Xxxxx
Chairman & CEO
AMENDMENT NO. 1 TO THE ST. XXXX COMPANIES, INC.
DEFERRED STOCK GRANT AGREEMENT WITH XXXX XXXXX
DATED NOVEMBER 2, 1993
Section 3 of the Deferred Stock Grant Agreement (the "Agreement")
made and entered into the 2nd day of November, 1993 by and
between The St. Xxxx Companies, Inc. and Xxxx Xxxxx is hereby
amended as follows:
3. Condition Precedent. It is a condition precedent to the
issuance of any Deferred Shares that the Employee be an
employee of the Company or one of its subsidiaries at the
event or on the date set out below for issuance of such
Deferred Shares unless his employment shall have terminated
involuntarily without cause or that he shall have died or
become disabled and while an employee of the Company or one of
its subsidiaries. Unless the Employee's employment shall have
terminated earlier for reasons other than death or disability
or involuntary termination without cause, the Company shall
cause the issuance, fully paid and nonassessable, and delivery
to the Employee of two thousand Deferred Shares duly
registered in the Employee's name upon: 1) his return to the
U.S. from expatriate assignment; 2) involuntary termination
without cause; 3) his death or disability; or 4) March 14,
1997.
The capitalized terms used above shall have the same meaning as
defined in the Agreement.
In witness whereof, the parties have executed this Amendment No. 1
to the Agreement as of the 6th day of March, 1996 and such
Amendment shall be effective as of that date.
THE ST. XXXX COMPANIES, INC.
By /s/ Xxxx Xxx /s/ Xxxx Xxxxx
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Xxxx Xxx Xxxx Xxxxx
Senior Vice President
