WSI INDUSTRIES, INC. 2005 STOCK PLAN RESTRICTED STOCK BONUS AWARD AGREEMENT
EXHIBIT 10.5
RECIPIENT:
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AWARD DATE:
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RESTRICTED SHARES:
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LAPSE OF TIME RESTRICTIONS:
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Time Restrictions on the Restricted Shares for which the Performance Restrictions have lapsed lapse in equal installments over a three (3) year period as follows: | |
| One-third of such Shares on the date the fiscal [ ] year-end results have been audited and approved by the Company’s Board of Directors. | ||
| One-third of such Shares on and
after the second anniversary of
the Award Date. One-third of such Shares on and after the third anniversary of the Award Date. |
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LAPSE OF PERFORMANCE RESTRICTIONS
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Performance Restrictions on the Restricted Shares lapse upon achievement of performance goals established for Recipient under the Company’s [ ] Executive Bonus Program (the “Program”) as follows: | |
| Performance at the Maximum level under the Program, all Performance Restrictions lapse. | ||
| Performance above the Target level but below the Maximum level under the Program, Performance Restrictions lapse as to that number of Restricted Shares as equals the actual percentage of achievement within the range from Target level to Maximum level. For example, if Recipient has a performance level at the mid-point between Target and Maximum, Performance Restrictions would lapse as to 50% of the Restricted Shares. |
THIS RESTRICTED STOCK AWARD AGREEMENT is made as of the Award Date set forth above, by and
between WSI Industries, Inc., a Minnesota corporation (the “Company”) and the Recipient named above
(the “Recipient”) setting forth the terms and conditions of an Award of Restricted Stock granted
pursuant to WSI Industries, Inc., 2005 Stock Plan (the “Plan”). Capitalized terms used herein and
not defined shall have the meaning given such terms in the Plan.
1. Grant of Restricted Shares. In accordance with the terms of the Plan and subject to
the further terms, conditions and restrictions contained in this Agreement, the Company hereby
grants to Recipient the number of Restricted Shares set forth above. “Restricted Shares” means
shares of the Company’s common stock, $0.10 par value (the “Shares”) subject to the Restrictions
set forth in Section 3 of this Agreement.
2. Certificates for Shares. Certificates evidencing Restricted Shares shall be
deposited with the Company to be held in escrow until such Shares are released to the Recipient or
forfeited in accordance with this Agreement. The Recipient shall, simultaneously with the delivery
of this Agreement, deliver to the Company a stock power, in blank, executed by the Recipient. If
any Restricted Shares are forfeited, the Company shall direct the transfer agent of the Shares to
make the appropriate entries in its records showing the cancellation of the certificate or
certificates for such Restricted Shares and the Shares represented thereby shall have the status as
authorized but unissued Shares.
3. Restrictions. During the period prior to the lapse of the Time Restrictions and
Performance Restrictions as set forth in Section 5 (the “Restricted Period”) and subject to earlier
termination of the Restricted Period or forfeiture of the Restricted Shares, the Restricted Shares
and all rights with respect to the Restricted Shares, may not be sold, assigned, transferred,
exchanged, pledged, hypothecated or otherwise encumbered or disposed of and shall be subject to the
risk of forfeiture contained in Section 4 of this Agreement (such limitations on transferability
and risk of forfeiture being herein referred to as “Restrictions”), but the Recipient shall have
all other rights of a stockholder, including, but not limited to, the right to vote and receive
cash dividends on Restricted Shares. Any cash dividend paid with respect to the Restricted Shares
that have not yet vested will be reinvested (to the extent shares are available under the Plan) in
additional Restricted Shares (“Reinvested Restricted Shares”), rounded down to the nearest whole
Share, subject to the same restrictions on transferability and the possibility of forfeiture to the
Company as the Restricted Shares to which the dividend relates; provided, however, subject to the
terms of Section 4, that all Restrictions on the Reinvested Restricted Shares shall lapse on the
first date after such Reinvested Restricted Shares are issued that Restrictions on any Restricted
Shares lapse. The Restricted Shares received upon such reinvestment of cash dividends will be
valued at the Fair Market Value on the date such dividend is paid.
4. Forfeiture of Restricted Shares. If Recipient shall cease to be an employee of the
Company for any reason, all Shares that at that time are Restricted Shares shall thereupon be
forfeited by the Recipient to the Company without payment of any consideration therefor, and
neither the Recipient, nor any successor, heir, assign or personal representative shall have any
right or interest in or to such Restricted Shares or the certificates evidencing the Restricted
Shares. In addition, any Shares for which the Performance Restrictions do not lapse, and all
Reinvested Restricted Shares which are issued in respect to such forfeited Shares, shall thereupon
be forfeited by the Recipient to the Company without payment of any consideration
therefor, and neither the Recipient, nor any successor, heir, assign or personal representative
shall have any right or interest in or to such Restricted Shares or Reinvested Restricted Shares or
the certificates evidencing the Restricted Shares or Reinvested Restricted Shares.
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5. Lapse of Restrictions.
(a) Except as provided in Section 4 or in Section 5(b), the Restrictions on the
Restricted Shares granted under this Agreement shall lapse as to the number of Restricted
Shares and at the times stated above under both “Lapse of Time Restrictions” and “Lapse of
Performance Restrictions”. Upon lapse of the Restrictions in accordance with this Section,
the Company shall, as soon as practicable thereafter, deliver to the Recipient a certificate
for the Shares with respect to which such Restrictions have lapsed.
(b) Notwithstanding any other provision of this Agreement, all Restrictions with
respect to any Restricted Shares shall lapse on the date determined by the Committee (as
defined in the Plan) prior to, but in no event more than sixty (60) days prior to, the
occurrence of any of the following events: (i) dissolution or liquidation of the Company,
other than in conjunction with a bankruptcy of the Company or any similar occurrence; (ii)
any merger, consolidation, acquisition, separation, reorganization or similar occurrence
where the Company will not be the surviving entity; or (iii) the transfer of substantially
all of the assets of the Company, or 75% or more of the outstanding Stock of the Company.
6. Non-transferability. Neither the Restricted Shares nor this Restricted Stock Award
Agreement nor any interest in the Shares or Award may be anticipated, alienated, encumbered, sold,
pledged, assigned, transferred or subjected to any charge or legal process, other than by will or
the laws of descent and distribution, so long as the Restrictions have not lapsed as to any
Restricted Share and the Shares have not been delivered in accordance with the Plan, and any sale,
pledge, assignment or other attempted transfer shall be null and void.
7. Adjustments. In the event of a corporate transaction involving the Company, the
Common Stock or the Company’s corporate or capital structure, including but not limited to any
stock dividend, stock split, extraordinary cash dividend, recapitalization, reorganization, merger,
consolidation reclassification, split-up, spin-off combination or exchange of shares, or a sale of
the Company or of all or part of its assets or any distribution to stockholders other than a normal
cash dividend, the Committee shall make such proportional adjustments as are necessary to preserve
the benefits or potential benefits of the Awards of Restricted Shares. Action by the Committee may
include all or any adjustment in (a) the maximum number and kind of securities subject to the Plan
as set forth in this section; (b) the maximum number and kind of securities that may be made
subject to an Award of Restricted Shares for any individual; (c) the number and kind of securities
subject to any outstanding Award; and (d) any other adjustments that the Committee determines to be
equitable.
8. Successors and Heirs. This Agreement shall be binding upon and inure to the benefit
of the Company and its successors and assigns, and upon any person acquiring, whether by merger,
consolidation, purchase of assets or otherwise, all or substantially all of the Company’s assets
and business.
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9. Governing Law. This Restricted Stock Award Agreement and the Restricted Shares will
be construed, administered and governed in all respects under and by the applicable laws of the
State of Minnesota, excluding any conflicts or choice of law rule or principle that might otherwise
refer construction or interpretation of this agreement, the Plan, the award or the Restricted
Shares to the substantive law of another jurisdiction.
10. Tax Withholding. The Company shall deduct from the number of Shares deliverable
upon lapse of the Restrictions under this Restricted Stock Award Agreement such number of Shares as
may be required to pay the amount of any federal, state or local taxes of any kind required by law
to be withheld with respect to the grant, lapse of Restrictions, payment or settlement of an Award
under this Restricted Stock Award Agreement. Shares withheld or surrendered to satisfy tax
withholding will be valued at Fair Market Value as of the date such Shares are withheld or
surrendered.
11. Miscellaneous. Notwithstanding anything in this Agreement to the contrary, the
terms of this Agreement shall be subject to the terms of the Plan. In accordance with the Plan, all
decisions of the Committee shall be final and binding upon Recipient and the Company.
IN WITNESS WHEREOF, the Company and the Recipient have each executed and delivered this
Agreement as of the date first above written.
| WSI INDUSTRIES, INC. |
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| By: | ||||
| Xxxxxxx X. Xxxxx | ||||
| Chief Executive Officer | ||||
| RECIPIENT: |
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