EXHIBIT 10.3
X.X. XXXXXXXX TOBACCO HOLDINGS, INC.
1999 LONG TERM INCENTIVE PLAN
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RESTRICTED STOCK AGREEMENT
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DATE OF GRANT: JULY 31, 2003
W I T N E S S E T H:
1. Grant of Restricted Stock. Pursuant to the provisions of the 1999 Long
Term Incentive Plan (the "Plan"), X.X. Xxxxxxxx Tobacco Holdings, Inc. (the
"Company") on the above date has granted, and this Restricted Stock Agreement
(this "Agreement") evidences the grant to
(FIRST NAME) (LAST NAME) (THE "GRANTEE")
subject to the terms and conditions which follow and the terms and conditions of
the Plan, of a total of
(REST STOCK) SHARES
of Common Stock of the Company ("Common Stock"). A copy of the Plan is attached
and made a part of this Agreement with the same effect as if set forth in the
Agreement itself. All capitalized terms used in this Agreement below shall have
the meaning set forth in the Plan, unless otherwise indicated.
2. Receipt and Delivery of Stock. The Grantee waives receipt from the
Company of a certificate or certificates representing the shares of Common Stock
granted hereunder, registered in the Grantee's name and bearing a legend
evidencing the restrictions imposed on such shares of Common Stock by this
Agreement. The Grantee acknowledges and agrees that the Company shall retain
custody of such certificate or certificates until the restrictions imposed by
Section 3 of this Agreement on the shares of Common Stock granted hereunder
lapse. The Grantee acknowledges and agrees that, alternatively, the shares of
Common Stock granted hereunder may be maintained in book-entry form with
instructions from the Company to the Company's transfer agent that such shares
shall remain restricted until the restrictions imposed by Section 3 of this
Agreement on such shares lapse.
3. Restrictions on Transfer of Stock. The shares of Common Stock granted
hereunder may not be sold, tendered, assigned, transferred, pledged or otherwise
encumbered prior to the earliest of:
(a) July 31, 2006, for 100% of the shares;
(b) the date of the Grantee's death, for 100% of the shares;
(c) the date of the Grantee's Permanent Disability (as defined in
the Company's Long Term Disability Plan), for 100% of the
shares;
(d) the date of the Grantee's Retirement (as defined in this
Section 3); or
(e) the date of a Change of Control (as defined in the Plan), for
100% of the shares.
For purposes of this Agreement, the term "Retirement" shall mean
retirement at age 65 or over, or early retirement at age 55 or over with the
approval of the Chief Executive Officer of the Company, which approval
specifically states the number or percentage of shares (rounded to the nearest
whole number of shares) with respect to which the restrictions referred to in
this Section 3 will lapse.
In the event of the Grantee's involuntary Termination of Employment
without Cause (as such terms are defined in Section 5 of this Agreement), the
restrictions imposed by this Section 3 will lapse with respect to that number of
shares of Common Stock (rounded to the nearest whole number of shares) which is
equal to the product of (i) the total number of shares of Common Stock granted
to the Grantee under this Agreement and (ii) a fraction, the numerator of which
is the number of whole or partial months between the Date of Grant and date of
the Grantee's Termination of Employment, and the denominator of which is 36.
At the time the restrictions imposed by this Section 3 shall lapse, the
appropriate number of shares of Common Stock shall be delivered to the Grantee
without a restrictive legend on any Common Stock certificate, or, if such shares
are held in book-entry form, the Company's transfer agent shall be instructed to
remove the restrictions on such shares.
4. Forfeiture of Stock; Grant of Additional Stock. (a) For the shares of
Common Stock granted hereunder to vest, the Company must pay to its stockholders
a dividend of at least $0.95 per share in each fiscal quarter during the period
commencing on the Date of Grant and ending on December 31, 2005 (the "Threshold
Requirement"), unless the Company's Board of Directors specifically approves the
nonforfeiture of such shares upon the declaration of a quarterly dividend of
less than $0.95 per share. In the event the Company fails to pay to its
stockholders a dividend of at least $0.95 per share in any fiscal quarter during
the period from the Date of Grant and ending on December 31, 2005, and the
Company's Board of Directors does not approve the
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nonforfeiture of the shares of Common Stock granted hereunder, the Grantee shall
forfeit all right, title and interest in and to the shares of Common Stock still
subject to the restrictions set forth in Section 3 of this Agreement and to any
dividends to be paid thereafter on such shares.
(b) Upon the Grantee's voluntary Termination of Employment or Termination
of Employment for Cause (as such terms are defined in Section 5 of this
Agreement), the Grantee shall forfeit all right, title and interest in and to
the shares of Common Stock still subject to the restrictions set forth in
Section 3 of this Agreement and to any dividends to be paid thereafter on such
shares.
(c) Any shares of Common Stock granted hereunder and subsequently
forfeited shall revert to the Company and shall not become transferable by the
Grantee or anyone claiming through the Grantee. The Compensation Committee of
the Company's Board of Directors (the "Compensation Committee") or its agent
shall act promptly to record forfeitures pursuant to this Section 4 on the stock
transfer books of the Company.
5. Termination of Employment. (a) For purposes of this Agreement, the term
"Termination of Employment" shall mean termination from active employment with
the Company or a subsidiary of the Company; it does not mean the termination of
pay and benefits at the end of a period of salary continuation (or other form of
severance pay or pay in lieu of salary).
(b) For purposes of this Agreement, if the Grantee has an employment or
severance agreement, employment shall be deemed to have been terminated for
"Cause" only as such term is defined in the employment or severance agreement.
For purposes of this Agreement, if the Grantee does not have an employment or
severance agreement that defines the term "Cause," the Grantee's employment
shall be deemed to have been terminated for "Cause" if the Termination of
Employment results from the Grantee's: (i) criminal conduct; (ii) deliberate and
continual refusal to perform employment duties on substantially a full time
basis; (iii) deliberate and continual refusal to act in accordance with any
specific lawful instructions of an authorized officer or employee more senior
than the Grantee; or (iv) deliberate misconduct which could be materially
damaging to the Company or any of its business operations without a reasonable
good faith belief by the Grantee that such conduct was in the best interests of
the Company. A Termination of Employment shall not be deemed for Cause hereunder
unless the senior human resources executive of the Company shall confirm that
any such Termination of Employment is for Cause. Any voluntary Termination of
Employment by the Grantee in anticipation of an involuntary Termination of
Employment for Cause shall be deemed to be a Termination of Employment for
Cause.
6. Dividends. If the Grantee is a stockholder of record on any applicable
record date, the Grantee shall receive any dividends on the shares of Common
Stock granted hereunder when paid regardless of whether the restrictions imposed
by Section 3 of this Agreement have lapsed.
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7. Voting. If the Grantee is a stockholder of record on any applicable
record date, the Grantee shall have the right to vote the shares of Common Stock
granted hereunder regardless of whether the restrictions imposed by Section 3 of
this Agreement have lapsed.
8. No Right to Employment. The execution and delivery of this Agreement
and the granting of shares of Common Stock hereunder shall not constitute or be
evidence of any agreement or understanding, express or implied, on the part of
the Company or its subsidiaries to employ the Grantee for any specific period or
in any particular capacity and shall not prevent the Company or its subsidiaries
from terminating the Grantee's employment at any time with or without Cause.
9. Registration. The shares of Common Stock granted hereunder may be
offered and sold by the Grantee only if such shares are registered for resale
under the Securities Act of 1933 (the "1933 Act"), as amended, or if an
exemption from registration under such Act is available. The Company has no
obligation to effect such registration. By executing this Agreement, the Grantee
(a) agrees not to offer or sell the shares of Common Stock granted hereunder
unless and until such shares are registered for resale under the 1933 Act or an
exemption from registration is available, (b) represents that the Grantee
accepts such shares of Common Stock for his own account for investment and not
with a view to, or for sale in connection with, the distribution of any part
thereof and (c) agrees that the Grantee or the Grantee's beneficiary, on
request, will be obligated to repeat these representations in writing prior to
any future delivery of such shares of Common Stock.
10. Change in Common Stock or Corporate Structure. In the event of any
stock split, spin-off, stock dividend, extraordinary cash dividend, stock
combination or reclassification, recapitalization or merger, Change of Control,
or similar event, the Compensation Committee shall make an appropriate
adjustment to the number or kind of shares or other consideration covered by
this Agreement and to the level of dividends required under Section 4(a) of this
Agreement, and such other revisions to this Agreement as it deems are equitably
required. Any adjustment or revision made by the Compensation Committee shall be
final and binding on the Grantee, the Company and all other interested persons;
provided, however, that the Compensation Committee may not make any such
adjustments or revisions that are adverse to the Grantee without the Grantee's
written consent.
11. Application of Laws. The granting of shares of Common Stock hereunder
shall be subject to all applicable laws, rules and regulations and to such
approvals of any governmental agencies as may be required.
12. Taxes. Any taxes required by federal, state or local laws to be
withheld by the Company on the Date of Grant or the delivery of unrestricted
shares of Common Stock hereunder shall be paid to the Company by the Grantee by
the time such taxes are
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required to be paid or deposited by the Company. The Grantee hereby authorizes
the Company to deduct a sufficient number of shares of Common Stock (rounded up
to the nearest whole share) (the "Tax Shares") to satisfy the minimum tax
withholding amount and any additional tax withholding amount requested by the
Grantee (collectively, the "Aggregate Withholding Amount") prior to the delivery
of unrestricted shares of Common Stock; provided, that, if the Company deducts
the applicable number of Tax Shares to satisfy the Aggregate Withholding Amount,
then the Company shall pay to the Grantee an amount in cash equal to the overage
on the Aggregate Withholding Amount as a result of rounding up the number of Tax
Shares to the nearest whole share.
13. Notices. Any notices required to be given hereunder to the Company
shall be addressed to The Secretary, X.X. Xxxxxxxx Tobacco Holdings, Inc., Post
Office Box 2866, Winston-Salem, NC 27102-2866, and any notice required to be
given hereunder to the Grantee shall be sent to the Grantee's address as shown
on the records of the Company.
14. Administration and Interpretation. In consideration of the grant, the
Grantee specifically agrees that the Compensation Committee shall have the
exclusive power to interpret the Plan and this Agreement and to adopt such rules
for the administration, interpretation and application of the Plan and Agreement
as are consistent therewith and to interpret or revoke any such rules. All
actions taken and all interpretations and determinations made by the
Compensation Committee shall be final, conclusive, and binding upon the Grantee,
the Company and all other interested persons. No member of the Compensation
Committee shall be personally liable for any action, determination or
interpretation made in good faith with respect to the Plan or the Agreement. The
Compensation Committee may delegate its interpretive authority to an officer or
officers of the Company.
15. Amendment. This Agreement is subject to the Plan, a copy of which is
attached. The Board of Directors may amend the Plan and the Compensation
Committee may amend this Agreement at any time and in any way, except that any
amendment of the Plan or this Agreement that would impair the Grantee's rights
under this Agreement may not be made without the Grantee's written consent.
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16. GOVERNING LAW. THE LAWS OF THE STATE OF DELAWARE SHALL GOVERN THE
INTERPRETATION, VALIDITY AND PERFORMANCE OF THE TERMS OF THIS AGREEMENT,
REGARDLESS OF THE LAW THAT MIGHT BE APPLIED UNDER PRINCIPLES OF CONFLICTS OF
LAWS.
IN WITNESS WHEREOF, the Company, by its duly authorized officer, and the
Grantee have executed this agreement as of the Date of Grant first above
written.
X.X. XXXXXXXX TOBACCO HOLDINGS, INC.
By:
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Authorized Signatory
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Grantee
Xxxxxxx's Taxpayer Identification Number:
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Xxxxxxx's Home Address:
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