XXXX XXXXX, INC.
1996 Equity Incentive Plan
RESTRICTED STOCK AGREEMENT
FOR
XXXXXXX X. XXXXX
To: Xxxxxxx X. Xxxxx
We are pleased to advise you that Xxxx Xxxxx, Inc. (the "Company")
hereby grants to you (the "Participant"), subject to your acceptance, which
shall be indicated by your execution of this Agreement below, pursuant to
the Xxxx Xxxxx, Inc. 1996 Equity Incentive Plan (the "Plan"), a restricted
stock award (the "Award") of 80,000 shares of the Company's Common Stock,
$.10 par value per share (the "Shares"), upon and subject to the
restrictions, terms and conditions set forth below. The date of grant of
the Award provided hereby (the "Grant Date") shall for all purposes be
December 8, 1998.
This Award is subject in all respects to the applicable provisions
of the Plan, a complete copy of which has been furnished to you and receipt
of which you acknowledge by acceptance of this Award. Such provisions are
incorporated herein by reference and made a part hereof. Capitalized terms
not defined herein that are defined in the Plan shall have the meanings
specified in the Plan.
In addition to the terms, conditions and restrictions set forth in
the Plan, all terms, conditions and restrictions set forth in this Agreement
are applicable to the Award granted hereby.
1. AWARD SUBJECT TO ACCEPTANCE OF AGREEMENT.
This Agreement shall be deemed withdrawn and become null and
void unless the Participant shall (a) accept this Agreement by executing it
in the space provided below and returning it to the Company and (b) execute
and return one or more irrevocable stock powers to facilitate the transfer
to the Company (or its assignee or nominee) of any Shares subject to this
Award, if such Shares are forfeited pursuant to Section 4 hereof or if
required under applicable laws or regulations. Promptly after the
Participant has executed this Agreement and such stock power or powers and
returned the same to the Company, the Company shall cause to be issued in
the Participant's name a stock certificate or certificates representing the
number of Shares subject to this Award.
2. RIGHTS AS A STOCKHOLDER.
Commencing on the Grant Date, the Participant shall have the right
to vote the Shares subject to this Award and to receive dividends and other
distributions thereon unless
and until such shares are forfeited pursuant to
Section 4 hereof; provided, however, that a dividend or other distribution
(including, without limitation, a stock dividend or stock split), other than
a cash dividend or distribution, shall be delivered to the Company (and, if
applicable, the Participant shall execute and return one or more irrevocable
stock powers related thereto) and shall be subject to the same vesting
schedule and other restrictions as the Shares with respect to which such
dividend or other distribution was made. In connection with the payment of
such dividends or other distributions, the Company may deduct any taxes or
other amounts required by any governmental authority to be withheld and paid
over to such authority for the account of Participant. The Participant
shall be entitled to retain cash dividends and distributions received
regardless of whether the Shares with respect to which such dividends or
distributions were made are subsequently forfeited pursuant to Section 4
hereof. Notwithstanding anything to the contrary, prior to the date on
which the Shares subject to this Award vest pursuant to Section 4 hereof,
such Shares shall be subject to the restrictions on transferability
contained in Section 6.1 hereof.
3. CUSTODY AND DELIVERY OF SHARES.
The Company shall hold the certificate or certificates
representing the Shares subject to this Award (and any related property
received under Section 2 hereof) until such Shares have vested pursuant to
Section 4 hereof, and the Company shall promptly thereafter deliver the
certificate or certificates representing vested Shares (together with any
related property received under Section 2 hereof) to the Participant (or his
legal representative, beneficiary or heir); provided that the Company shall
have no obligation to deliver share certificates to the Participant until
the Participant has paid or caused to be paid all taxes required to be
withheld pursuant to Section 6.5 hereof or the Plan. Share certificates
representing vested Shares will not contain the legend provided for in
Section 6.1 hereof. The Company will pay all original issue or transfer
taxes and all fees and expenses incident to the delivery of any certificates
hereunder. Upon the vesting of all Shares subject to this Award pursuant to
Section 4 hereof, the Company will destroy the stock power or powers
referred to in Section 1 hereof.
4. VESTING AND FORFEITURE.
(a) Except as otherwise provided in the Plan or this
Agreement, the Shares subject to this Award shall vest, shall become
transferable and shall cease to be subject to forfeiture (to "vest") in
accordance with the following schedule: twenty-five percent (25%) of the
Shares subject to this Award (20,000 shares) shall vest on each of December
8, 1999, December 8, 2000, December 8, 2001 and December 8, 2002.
(b) All restrictions upon all Shares subject to this
Award shall lapse, and all such Shares shall immediately vest upon the
earliest to occur of any of the following events:
(1) a Change of Control (as defined below);
(2) the termination of Participant's employment
without Cause (as defined below) by the Company; or
(3) the termination of Participant's employment
with the Company by reason of (i) his death or (ii)
his permanent disability (as defined in the Company's
then applicable long-term disability plan).
(c) In the event the Participant shall cease being
employed by the Company, for any reason, prior to the date on which all
Shares subject to this Award have vested pursuant to any of the preceding
paragraphs of this Section 4, this Award shall immediately terminate, on the
date on which Participant's employment terminates, with respect to all such
Shares that have not vested and all the Shares subject to this Award that
have not vested as of such date (together with any related property held by
the Company pursuant to Section 2 hereof) shall be forfeited to
the Company.
(d) For purposes of this Agreement:
(1) "Cause" shall mean Participant's intentional
gross misconduct that is damaging to the Company
in a material way.
(2) a "Change of Control" shall be deemed to
have occurred at such time as (i) any "person" (as
such term is used in Sections 13(d) and 14(d)(2) of
the Securities Exchange Act of 1934, as amended
(the "1934 Act")) other than an affiliate of the
Company on the date hereof, becomes the beneficial
owner (as defined in Rule 13d-3 of the 1934 Act),
directly or indirectly, of securities of the Company
or a successor representing 50% or more of the
combined voting power of the Company's then
outstanding securities having the ordinary right to
elect directors of the Company or (ii) the Company's
stockholders shall have approved any agreement
providing for a merger in which the Company will not
remain an independent publicly owned company or a
consolidation or sale or other disposition of all or
substantially all of the assets of the Company.
5. TERMINATION OF AWARD.
In the event that the Participant shall forfeit any Shares
subject to this Award, the Participant shall, within ten (10) days of the
date of the Company's written request, return this Agreement to the Company
for cancellation.
6. ADDITIONAL TERMS AND CONDITIONS OF AWARD.
6.1. NONTRANSFERABILITY OF SHARES.
Prior to the date on which Shares subject to this Award vest
pursuant to Section 4 hereof, such Shares may not be sold, transferred,
assigned, pledged, hypothecated, encumbered or otherwise disposed of (whether
by operation of law or otherwise) or be subject to execution, attachment or
similar process. Any such attempted sale, transfer, assignment, pledge,
hypothecation or encumbrance, or other disposition of such Shares shall be
null and void. Each certificate issued in respect of Shares subject to this
Award shall bear the following legend, or any similar legend as may be
required by the Committee, until such Shares vest:
"THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED, PLEDGED, HYPOTHECATED, ENCUMBERED OR
OTHERWISE DISPOSED OF (WHETHER BY OPERATION OF LAW OR OTHERWISE)
EXCEPT AS PERMITTED BY THE XXXX XXXXX, INC. 1996 EQUITY INCENTIVE PLAN
OR THE COMMITTEE WHICH ADMINISTERS THAT PLAN."
6.2. SECURITIES LAWS.
Participant hereby represents and covenants that if in the
future the Participant decides to offer or dispose of any Shares subject to
this Award or interest therein, the Participant will do so only in
compliance with this Agreement, the Securities Act of 1933, as amended, and
all applicable state securities laws. As a condition precedent to the
delivery to Participant of any Shares subject to this Award, Participant
shall comply with all regulations and requirements of any regulatory
authority having control of or supervision over the issuance of the Shares
and, in connection therewith, shall execute any documents and make any
representation and warranty to the Company which the Committee shall in its
sole discretion deem necessary or advisable.
6.3. ADJUSTMENT.
In the event that there occurs (a) any change in the number
of outstanding shares of Common Stock of the Company through the declaration
of dividends, stock splits or the like or through any change in the capital
account of the Company or any other transaction referred to in Section 424(a)
of the Code or (b) any other change in the capital structure or in the Common
Stock of the Company, then, if applicable, the number and class of shares
subject to this Award shall be adjusted as provided in the Plan. Any
decision of the Committee regarding the amount and timing of any adjustment
will be final and conclusive.
6.4. COMPLIANCE WITH APPLICABLE LAW.
This Award is subject to the condition that if the listing,
registration or qualification of the Shares subject to this Award upon any
securities exchange or under any law, or the consent or approval of any
governmental body, or the taking of any other action is necessary or
desirable as a condition of, or in connection with, the vesting or delivery
of shares hereunder, the Shares subject to this Award may not be delivered,
in whole or in part, unless such listing, registration, qualification,
consent or approval shall have been effected or obtained. The Company agrees
to make every reasonable effort to effect or obtain any such listing,
registration, qualification, consent or approval.
6.5. WITHHOLDING; TAX MATTERS
(a) Participant will remit to the Company an amount
sufficient to satisfy any federal, state or local withholding tax
requirements, prior to the delivery of Shares pursuant to Section 3 hereof.
Participant may satisfy the withholding requirements in whole or in part by
electing to have the Company withhold from delivery vested Shares subject to
this Award having a value equal to the amount required to be withheld.
The value of the Shares to be withheld will be the fair market value, as
determined by the Committee, of the Shares on the date that the
amount of
tax to be withheld is determined (the "Tax Date"). Such election, if made,
must be made prior to the Tax Date, must comply with all applicable
securities law and other legal requirements, as interpreted by the Committee,
and may not be made unless approved in advance by the Committee in its
discretion.
(b) If Participant makes the election provided under
Section 83(b) of the Code to be taxed currently on the value of any Shares
subject to this Award notwithstanding the restrictions placed upon such
Shares (the "Section 83(b) Election"), Participant will promptly notify the
Company, will complete, sign and return to the Company the Section 83(b)
Election Form which was distributed herewith and will remit to the Company
with such form in cash an amount sufficient to satisfy any federal, state or
local withholding tax requirements. Notwithstanding the foregoing, it is a
condition of this Award that the Participant not make a Section 83(b)
Election with respect to more than fifty percent (50%) of the Shares subject
to this Award (40,000 Shares).
(c) The Company reserves the right to make whatever
further arrangements it deems appropriate for the withholding of taxes in
connection with any transaction contemplated by this Agreement or the Plan,
including, without limitation, providing for payments of withholding taxes
by deducting amounts required to be withheld, plus interest thereon, from
payments of any kind by the Company or any of its subsidiaries to which
Participant would otherwise be entitled.
6.6. AWARD CONFERS NO RIGHTS TO CONTINUED EMPLOYMENT.
Nothing in the Plan or in this Agreement shall confer upon
the Participant any right to continue in the employ of the Company or any
subsidiary of the Company for a specified period of time or interfere with
the right of the Company and its subsidiaries to terminate such employment
at any time.
6.7. DECISIONS OF COMMITTEE.
The Committee shall have the right to resolve all questions
which may arise in connection with this Award. Any interpretation,
determination or other action made or taken by the Board of Directors of the
Company or the Committee regarding the Plan or this Agreement shall be final,
binding and conclusive.
7. MISCELLANEOUS PROVISIONS.
7.1. SUCCESSORS; ASSIGNMENTS AND TRANSFERS.
This Agreement shall be binding upon and inure to the
benefit of any successor or successors of the Company and any person or
persons who shall, upon the death of the Participant, acquire any rights
hereunder. The rights and interests of Participant under this Agreement may
not be sold, assigned, encumbered or otherwise transferred except in the
event of death of Participant, by will or by the laws of descent and
distribution. This Agreement may be assigned by the Company without the
Participant's consent.
7.2. NOTICES.
All notices, requests or other communications provided for
in this Agreement shall be made in writing either (a) by actual delivery to
the party entitled thereto, or (b) by mailing in the United States mails to
the address of the party entitled thereto as set forth below, via certified
or registered mail, return receipt requested. The notice shall be deemed to
be received in case of delivery, on the date of its actual receipt by the
party entitled thereto, and in case of mailing, five days following the date
of such mailing. Any notice mailed to the Company shall be addressed to the
General Counsel of the Company at 000 Xxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxx 00000. Any notice mailed to Participant shall be addressed to
Participant at Participant's address as reflected in the personnel records
of the Company. Either party hereto may designate a different address for
notices than the one provided herein by notice to the other.
7.3. GOVERNING LAW.
This Agreement shall be governed by, and interpreted in
accordance with, the internal laws of the State of Maryland (without regard
to conflicts of laws rules thereof).
7.4. COUNTERPARTS.
This Agreement may be executed in two counterparts each of
which shall be deemed an original and both of which together shall
constitute one and the same instrument.
XXXX XXXXX, INC.
By: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: Senior Vice President
and General Counsel
In order to indicated your acceptance of the shares of restricted
stock granted by this Agreement subject to the restrictions and upon the
terms and conditions set forth above and in the Plan, please execute and
immediately return to the General Counsel of the Company the enclosed
duplicate original of this Agreement. The grant shall be deemed to have
been withdrawn if your acceptance has not been received at the office of the
General Counsel of the Company by 5:00 p.m. on February 8, 1999.
Agreed and Accepted this 13 day of
January, 1999.
/s/ Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx
