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EXHIBIT 10(s)
Restricted Stock Agreement,
effective as of January 4, 1998, between
X. X. Xxxxx Corporation and Xxxxxxxxx Xxxxxx
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XXXXXX
RESTRICTED
STOCK
AGREEMENT
This AGREEMENT is made to be effective as of January 4, 1998,
by and between X. X. Xxxxx Corporation, an Ohio corporation (the "Company"), and
Xxxxxxxxx Xxxxxx ("Xxxxxx").
RECITALS:
1. Xxxxxx possesses unique skills, knowledge and experience
related to the business of the Company which he has developed in his many years
of service to the Company, including his extended service as an executive
officer of the Company.
2. The Company desires to reward Xxxxxx for his significant
contributions to the Company in the past and to encourage Xxxxxx to remain in
the employment of the Company and put forth maximum efforts for the success of
the Company in the future.
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants expressed in this Agreement, the Company and Xxxxxx make the
following agreements, intending to be legally bound thereby:
Section 1.
(A) Award and Issuance of Restricted Shares. In consideration
of and conditioned upon Xxxxxx'x continued service in a key management position
with the Company, and subject to the terms and conditions hereinafter set forth,
the Company shall issue an aggregate of 10,000 common shares, $1.00 par value,
of the Company (the "Restricted Shares") to Xxxxxx over a period of up to eight
fiscal years of the Company. Xxxxxx shall be entitled to receive 1,250
Restricted Shares on the last business day of each fiscal year of the Company,
beginning with the 1998 fiscal year so long as he is employed by the Company on
such date, until the earlier of the following events to occur: (i) Xxxxxx has
received or has become entitled to receive all of the Restricted Shares covered
by this Agreement, or (ii) Xxxxxx'x right to receive Restricted Shares has been
terminated under the terms of this Agreement. Xxxxxx shall be entitled to
receive an additional 1,250 Restricted Shares in respect of any and each fiscal
year of the Company in which the Company achieves 120% of the "target profit
goal" established by the Company's Board of Directors for that fiscal year in a
manner consistent with past practices (the "Target Profit Goal"). The Target
Profit Goal shall be computed before deducting any amounts expensed for taxes,
payments under the Company's annual profit-sharing incentive bonus program and
charitable contributions. In the event that Xxxxxx is to be issued Restricted
Shares in respect of the achievement by the Company of the Target Profit Goal in
respect of any fiscal year, unless such issuance is deferred as permitted under
Subsection 1(D) of this Agreement, such Restricted Shares shall be issued to
Xxxxxx not later than 60 days after the end of such fiscal year.
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(B) Rights of Xxxxxx in Respect of Restricted Shares. Xxxxxx
shall have no rights as a shareholder of the Company or any other rights with
respect to any of the Restricted Shares covered by this Agreement unless and
until a share certificate is issued to him evidencing his ownership of such
Restricted Shares.
(C) Effect of Termination of Employment Upon Right to Receive
Restricted Shares.
(1) General. If Xxxxxx'x employment with the Company
terminates for any reason [other than within two years following a Change in
Control (as provided in Subsection 1(C)(2) below) or as a result of his death],
Xxxxxx shall forfeit the right to receive any additional Restricted Shares under
this Agreement following such termination of employment other than (i)
Restricted Shares issuable in respect of the achievement of the Target Profit
Goal for a completed fiscal year provided that Xxxxxx was employed by the
Company on the last day of such fiscal year; and (ii) Restricted Shares, the
receipt of which has been deferred as permitted under Subsection 1(D) of this
Agreement. Any Restricted Shares issuable at the time of such termination of
employment as a result of the achievement of the Target Profit Goal for a
completed fiscal year shall be issued to Xxxxxx as contemplated by Subsection
1(A) above. Any Restricted Shares with respect to which receipt has been
deferred shall be issued to Xxxxxx as contemplated by Subsection 1(D), below.
(2) Within Three Years Following a Change in Control. If,
within two years following a Change in Control of the Company, Xxxxxx'x
employment is terminated by the Company without Cause or by Xxxxxx for Good
Reason, Xxxxxx shall be entitled to immediately be issued all of the Restricted
Shares subject to this Agreement which have not previously been issued.
(i) For purposes of this Agreement, the Company shall be deemed
to have terminated Xxxxxx'x employment for "Cause" only if
upon the occurrence of one of the following circumstances:
(a) The willful and continued refusal by Xxxxxx to perform
his duties with the Company (other than any such refusal
resulting from his incapacity due to physical or mental
illness), after a demand for substantial performance is
delivered to Xxxxxx by the Company which specifically
identifies the manner in which it is believed that Xxxxxx
has refused substantially to perform his duties; (b)
Conviction of Xxxxxx of any felony; or (c) Willful or gross
misconduct by Xxxxxx which is materially and demonstrably
injurious to the Company.
(ii) For purposes of this Agreement, Xxxxxx shall be deemed to
have terminated his employment for "Good Reason" under any
of the following circumstances: (a) the assignment to
Xxxxxx, without his consent, of any duties materially
inconsistent with his position, duties, responsibilities and
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status with the Company as of the date of this Agreement, or
a change in Xxxxxx'x responsibilities, as in effect on the
date of this Agreement, which materially diminishes Xxxxxx'x
responsibilities with the Company when considered as a
whole; provided, however that the foregoing shall not
constitute Good Reason if done in connection with the
termination of Xxxxxx'x employment because of disability or
for Cause; (b) any material reduction in the compensation
and benefits provided to Xxxxxx at the time of the Change in
Control; (c) any material breach by the Company of any
employment agreement with Xxxxxx; or (d) the Company's
requiring Xxxxxx, without his consent, to be based anywhere
other than the location where Xxxxxx is based on the date of
this Agreement, if the same requires Xxxxxx to relocate his
principal residence; or in the event Xxxxxx consents to be
based anywhere other than such location, the failure by the
Company to pay (or reimburse Xxxxxx for) all reasonable
living expenses incurred by Xxxxxx relating to a change of
Xxxxxx'x principal residence in connection with such
relocation.
(iii) A "Change in Control" shall be deemed to have occurred if
(a) any "person" (as that term is used in Section 13(d) and
Section 14(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), on the date of this
Agreement), including any "group" as such term is used in
Section 13(d)(3) of the Exchange Act on the date of this
Agreement (an "Acquiring Person"), shall hereafter acquire
(or disclose the previous acquisition of) beneficial
ownership (as that term is defined in Section 13(d) of the
Exchange Act and the rules promulgated thereunder on the
date of this Agreement) of shares of the outstanding stock
of any class or classes of the Company which results in such
person or group possessing more than 50.1% of the total
voting power of the Company's outstanding voting securities
ordinarily having the right to vote for the election of
directors of the Company; or (b) as the result of, or in
connection with, any tender or exchange offer, merger or
other business combination, sale of assets or contested
election, or any combination of the foregoing transactions
(each, a "Transaction"), the persons who were directors of
the Company immediately before the completion of the
Transaction shall cease to constitute a majority of the
Board of Directors of the Company or any successor to the
Company.
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(3) Upon Death. If Xxxxxx dies while an employee of the
Company, his estate shall be entitled to immediately be issued all of the
Restricted Shares subject to this Agreement, which have not previously been
issued.
(D) Deferral of Receipt of Restricted Shares. To the extent
permitted by applicable law, Xxxxxx shall be permitted to defer, in accordance
with the terms of the Company's Deferred Compensation Plan (the "Deferred
Compensation Plan"), the receipt of any Restricted Shares which he would
otherwise be entitled to receive under the terms of this Agreement, until such
time as he is entitled to receive a distribution of his "Account" under the
Deferred Compensation Plan.
(E) Satisfaction of Tax Withholding Obligations. Each issuance
of Restricted Shares under this Agreement shall be subject to withholding of all
federal, state and local taxes of any kind required to be withheld with respect
to such issuance. At the election of Xxxxxx, such withholding obligations may be
satisfied through the surrender of common shares of the Company which Xxxxxx
already owns, or the withholding of Restricted Shares which Xxxxxx would
otherwise be entitled to be issued under the terms of this Agreement. Any common
shares delivered to the Company, or Restricted Shares withheld from issuance, in
order to satisfy tax withholding obligations shall be valued based upon the Fair
Market Value of the Company's common shares when the tax withholding is required
to be made. For purposes of this Agreement, the "Fair Market Value" of the
Company's common shares on a particular date shall be the closing sale price for
the Company's common shares as reported on any securities exchange on which the
Company's common shares may be listed on such date, or if no such sale occurred
on that date, then for the next preceding date on which a sale was made. If the
common shares should no longer be listed on a securities exchange, the Fair
Market Value shall be determined by the Compensation Committee of the Company's
Board of Directors or any committee performing similar functions.
Section 2. Adjustments upon Changes in Capitalization or
Otherwise Affecting the Company's Common Shares. In the event of any change in
capitalization affecting the common shares of the Company, such as a stock
dividend, stock split, recapitalization, merger, consolidation, split-up,
combination or exchange of shares or other form of reorganization, or any other
change affecting the common shares, such proportionate adjustments to reflect
such change shall be made in the maximum number of Restricted Shares which may
be issued to Xxxxxx pursuant to this Agreement and the number of Restricted
Shares which may be issued in respect of any fiscal year of the Company as shall
be necessary to preserve the benefits or potential benefits to be received by
Xxxxxx under the terms of this Agreement.
Section 3. Securities Law Matters.
(A) No Restricted Shares shall be issued under the terms of
this Agreement unless counsel for the Company shall be satisfied that such
issuance will be in compliance with all applicable federal and state securities
laws and the rules of any national securities exchange upon which the Company's
common shares are then listed.
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(B) Xxxxxx understands that the Restricted Shares to be issued
to him pursuant to this Agreement may be issued without registration under the
Securities Act of 1933, as amended (the "1933 Act"), or the securities laws of
any state in reliance upon specific exemptions therefrom. Xxxxxx understands
that the Restricted Shares to be issued pursuant to this Agreement may not then
be sold or transferred unless they are registered under the 1933 Act and any
applicable state or other securities laws, or unless exemptions from
registration under such laws are available.
(C) Xxxxxx acknowledges that any share certificate evidencing
Restricted Shares which have been issued without registration under the 1933 Act
shall be imprinted with a legend in substantially the following form:
THESE COMMON SHARES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES
LAWS, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED OR ASSIGNED
EXCEPT (i) PURSUANT TO REGISTRATIONS UNDER APPLICABLE
SECURITIES LAWS OR (ii) IF, IN THE OPINION OF COUNSEL
REASONABLY ACCEPTABLE TO THE COMPANY, THE PROPOSED OFFER,
SALE, TRANSFER OR ASSIGNMENT MAY BE EFFECTED IN COMPLIANCE
WITH APPLICABLE SECURITIES LAWS WITHOUT REGISTRATION.
(D) In the event that any of the Restricted Shares covered by
this Agreement shall be issued without registration under the 0000 Xxx, Xxxxxx
shall have the right to request that the Company cause such Restricted Shares to
be registered under the 1933 Act. The Company shall cause the registration
statement for the Restricted Shares owned by Xxxxxx to become effective under
the 1933 Act as soon as reasonably practicable after receipt of Xxxxxx'x
request; provided, however, that the Company may register the Restricted Shares
with any other securities for which registration may be sought and may delay the
registration of the Restricted Shares for a reasonable period of time (but not
longer than three months) to coincide with any anticipated securities
registration. Xxxxxx shall cooperate with all reasonable requests of the Company
in connection with the registration of the Restricted Shares. The expenses of
registering the Restricted Shares as provided above shall be borne by the
Company. The Company shall be obligated to keep the registration statement
effective under the 1933 Act until the earlier of: (i) the time when Xxxxxx no
longer owns the Restricted Shares, (ii) the time when Xxxxxx may sell the
Restricted Shares in reliance upon Rule 144(k) under the 1933 Act or any
successor provision, or (iii) the first anniversary of the registration
statement effective date. Xxxxxx shall only have the right to require the
Company to file one registration statement.
Section 4. Waiver. The failure of either party to this
Agreement to insist, in any one or more instances, upon the performance of any
of the terms, covenants or conditions of this Agreement by the other party
hereto, shall not be construed as a waiver or as a relinquishment of any right
granted hereunder to the party failing to insist on such performance, or as a
waiver of
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the future performance of any such term, covenant or condition, but the
obligations hereunder of both parties hereto shall remain unimpaired and shall
continue in full force and effect.
Section 5. Successors; Binding Agreement.
(A) The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company and its
subsidiaries to expressly assume and agree to perform the obligations under this
Agreement in the same manner and to the same extent that the Company would be
required to perform them if no succession had taken place. Failure of the
Company to obtain such agreement prior to the effectiveness of any such
succession shall be a breach of this Agreement and shall entitle Xxxxxx to
receive all of the Restricted Shares subject to this Agreement which he has not
been issued. As used in this Agreement, "Company" shall mean the Company as
defined above and any successor to its business and/or assets as aforesaid which
executes and delivers the agreement provided for in this Section 5 or which
otherwise becomes bound by all the terms and provisions of this Agreement by
operation of law.
(B) This Agreement shall inure to the benefit of and be
enforceable by Xxxxxx'x personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.
Section 6. Notices. For the purpose of this Agreement, notices
and all other communications provided for this Agreement shall be in writing and
shall be deemed to have been duly given when delivered or mailed by United
States registered mail, return receipt requested, postage prepaid, addressed in
the case of Xxxxxx, to
Xxxxxxxxx Xxxxxx
0000 Xxxx Xxxx Xxxx
Xxx Xxxxxxx, XX 00000
and in the case of the Company, to the principal executive offices of the
Company, provided that all notices to the Company shall be directed to the
attention of the Company's Chief Executive Officer with copies to the Secretary
of the Corporation and to its Board of Directors, or to such other address as
either party may have furnished to the other in writing in accordance herewith,
except that notices of change of address shall be effective only upon receipt.
Section 7. Miscellaneous. No provisions of this Agreement may
be modified, waived or discharged unless such waiver, modification or discharge
is agreed to in a writing signed by Xxxxxx and a duly authorized officer of the
Company. No waiver by either party hereto at any time of any breach by the other
party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. No agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made by either
party which are not set forth expressly in this Agreement.
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The validity, interpretation, construction and performance of this Agreement
shall be governed by the laws (but not the law of conflicts of laws) of the
State of Ohio.
Section 8. Validity. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provisions of this Agreement, which shall remain in full force and
effect.
IN WITNESS WHEREOF, the parties hereto have executed, or
caused to be executed, this Agreement as of the date and year first above
written.
COMPANY:
X. X. XXXXX CORPORATION
By: /s/ XXXXXX XXXXX
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Xxxxxx Xxxxx, its Chairman and Chief
Executive Officer
XXXXXX:
/s/ XXXXXXXXX XXXXXX
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Xxxxxxxxx Xxxxxx
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