EXHIBIT 10.38
RESTRICTED STOCK AGREEMENT
THIS RESTRICTED STOCK AGREEMENT is entered into this _______ day of
August, 2005 but effective as of June 13, 2005 (being the grant date of this
restricted stock award), between OM Group, Inc., a Delaware corporation (the
"Company"), and Xxxxxx X. Xxxxxxxxx (the "Executive").
WHEREAS, the Company maintains the 1998 Long-Term Incentive
Compensation Plan (the "Plan") for the purpose of (i) motivating executive
personnel by means of long-term incentive compensation, (ii) furthering the
identity of interests of participants with those of the shareholders of the
Company through ownership and performance of the common stock of the Company,
and (iii) permitting the Company to attract and retain directors and executive
personnel upon whose judgment the successful conduct of the business of the
Company largely depends.
WHEREAS, pursuant to the terms of the Plan, the terms, conditions and
restrictions of each restricted stock award is to be set forth in an award
agreement.
NOW, THEREFORE, the Company and the Executive agree as follows:
1. Award of Restricted Stock.
Subject to the terms, conditions and restrictions set forth in this
Agreement, the Company hereby grants to the Executive an award of 166,194 shares
of common stock of the Company (the "Restricted Stock").
2. Restrictions on Transfer of Restricted Stock.
The Executive shall not be entitled to sell, exchange, transfer,
pledge, hypothecate, assign or otherwise dispose of the Restricted Stock until
such time that such Restricted Stock has vested in accordance with this
Agreement. Any attempted sale, exchange, transfer, pledge, hypothecation,
assignment or other disposition of such Restricted Stock in violation of this
Agreement shall be void and of no effect and the Company shall have the right to
disregard the same on its books and records.
3. Issuance of Stock Certificate.
The Company shall cause a certificate evidencing the Restricted Stock
to be issued in the name of the Executive following execution of this Agreement.
Such certificate shall bear the following legend, together with any other legend
deemed necessary or desirable by the Company in order to comply with applicable
laws or to ensure the enforceability of the provisions of the Plan or this
Agreement:
The sale or other transfer of the shares represented by this
certificate is subject to certain restrictions set forth in the
Restricted Stock Agreement between Xxxxxx X. Xxxxxxxxx (the
registered owner) and OM Group, Inc., effective as of June 13,
2005 under the OM Group, Inc. 1998 Long-Term Incentive
Compensation Plan. A copy of such restrictions may be obtained
from the Secretary of OM Group, Inc.
Such stock certificate shall be held by the Company (or its designated agent) on
behalf of the Executive until such time as the Restricted Stock has vested or is
forfeited in accordance with this Agreement.
4. Rights Relating to Restricted Stock.
The Restricted Stock shall constitute issued and outstanding shares of
common stock of the Company, and the Executive shall be entitled to exercise
voting rights pertaining to the Restricted Stock. In the event dividends are
paid by the Company with respect to the Restricted Stock prior to such time as
the Restricted Stock has vested in accordance with this Agreement, such
dividends shall be distributed to and held by the Company (or its designated
agent) in the same manner as the Restricted Stock and be distributed to the
Executive upon vesting of the Restricted Stock or forfeited in accordance with
this Agreement. In the event that shares of common stock of the Company are
distributed to owners of outstanding common stock by reason of a stock dividend,
stock split, recapitalization or otherwise, such shares received by the
Executive shall be encompassed within the term "Restricted Stock" for purposes
of this Agreement and the Executive shall deliver to the Company all such shares
received, to be held by the Company on behalf of the Executive subject to the
same restrictions as the Restricted Stock.
5. Vesting.
5.1 Vesting Date; Forfeiture; New Certificates.
(a) The Restricted Stock granted to the Executive pursuant to
this Agreement shall vest, such that the restrictions set forth in this
Agreement shall no longer be applicable and the Restricted Stock shall no longer
be subject to forfeiture as provided in this Agreement, on June 13, 2008 (the
"Vesting Date").
(b) In the event the Executive ceases to be employed by the
Company for any reason prior to the Vesting Date, the Executive shall forfeit to
the Company, without compensation or any other consideration, all Restricted
Stock that is granted pursuant to this Agreement. For purposes of this
Agreement, the Executive shall have ceased to be employed by the Company when he
no longer has the right or obligation to perform services for the Company,
notwithstanding the continuation of any employment agreement for any other
purpose or the continuation of compensation or benefits under any such
employment agreement or otherwise.
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(c) In the absence of a prior forfeiture of the Restricted
Stock pursuant to this Agreement, as promptly as practicable after the Vesting
Date and compliance with Section 6 of this Agreement, the Company shall cause a
new certificate or certificates to be issued in the name of the Executive, or
his designee, in exchange for the certificate for the Restricted Stock that is
described in Section 3 of this Agreement. Such new certificate shall not contain
the legend set forth in Section 3 of this Agreement but may contain any other
legend the Company believes is appropriate in order to comply with applicable
securities law requirements.
5.2 Accelerated Vesting upon Change in Control. Upon a Change in
Control (as defined in the Plan) of the Company prior to the Vesting Date,
vesting of the Restricted Stock subject to this Agreement shall be accelerated
in accordance with the provisions of Section 24(c) of the Plan, assuming the
Executive is employed by the Company at the time of such Change in Control.
6. Tax Provision. Executive agrees that, no later than the date upon
which the Restricted Stock becomes vested in accordance with this Agreement, the
Executive will pay to the Company, or make arrangements satisfactory to the
Company regarding payment of, any federal, state or local taxes of any kind
required by law to be paid and/or withheld with respect to such Restricted
Stock.
7. Special Incentive Compensation.
The Executive agrees that the award of the Restricted Stock under the
Agreement is special incentive compensation and that it, any dividends paid
thereon (even if treated as compensation for tax purposes) and any other
property received on account of such Restricted Stock will not be taken into
account as "salary" or "compensation" or "bonus" in determining the amount of
any payment under any pension, retirement or profit-sharing plan of the Company
or any life insurance, disability or other benefit plan of the Company.
8. Relationship to the Plan.
This Agreement is subject to the terms of the Plan and any related
administrative policies adopted by the Company. If there is any inconsistency
between this Agreement and the Plan or any such administrative policies, the
Plan and the policies, in that order, shall govern.
9. No Effect on Employment Relationship.
Executive's employment relationship with the Company is the subject of
a separate employment agreement and nothing in this Agreement shall interfere
with or affect the rights of the Company and the Executive under that employment
agreement or confer upon the Executive any right to continued employment with
the Company.
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10. Binding Effect.
Subject to the provisions of the Plan, this Agreement shall inure to
the benefit of and be binding upon the Executive and the Company and their
respective heirs, legal representatives, successors and assigns.
11. Amendment.
No amendment, modification, waiver or release of or under this
Agreement will be effective unless evidenced by an instrument in writing signed
by each of the Company and the Executive.
12. Governing Law.
This Agreement shall be governed by and construed in accordance with
the laws of the State of Ohio, without regard to principles of conflict of laws.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
OM GROUP, INC.
By
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EXECUTIVE
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Xxxxxx X. Xxxxxxxxx
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