RESTRICTED STOCK AGREEMENT
Exhibit 99.3
[Performance-based]
THIS RESTRICTED STOCK AGREEMENT is dated as of the day of
, (being the
grant date of this restricted stock award), between OM Group, Inc., a Delaware corporation (the
“Company”), and (the “Executive”).
WHEREAS, the Company maintains the 1998 Long-Term Incentive Compensation Plan and the 2002
Stock Incentive Plan (as applicable to this restricted stock award, 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 stockholders 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 are 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 shares of common stock of the Company (the
“Restricted Stock”) under the 1998 Long-Term Incentive Compensation Plan/2002 Stock Incentive Plan
(cross out inapplicable Plan).
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 (the registered owner) and OM Group,
Inc., dated as of . 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 its common 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 or other securities are distributed to owners of outstanding common stock by reason of a
stock dividend, stock split, recapitalization or otherwise, such shares or securities 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 or securities 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 Satisfaction of Performance Targets.
(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, upon the attainment
of specific performance targets based upon the average return on net assets of the Company (RONA)
and the cumulative operating income of the Company (collectively, the “Performance Targets”) for
the -year period ending on (the “Performance Period”). If such Performance
Targets are not attained by the end of such Performance Period, the Restricted Stock granted
pursuant to this Agreement shall be forfeited to the Company without compensation or other
consideration. The specific Performance Targets and Performance Period applicable to this
Restricted Stock grant shall be as previously determined by the Compensation Committee of the Board
of Directors of the Company and communicated to the Executive in writing.
(b) In the absence of a prior forfeiture of the Restricted Stock pursuant to this Agreement,
as promptly as practicable after satisfaction of the Performance Targets and
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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 the Executive’s 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 end of the Performance Period, vesting of the Restricted
Stock subject to this Agreement shall be accelerated in accordance with the provisions of Section
24(c) or Section 22(b) of the applicable Plan, assuming the Executive is employed by the Company at
the time of such Change in Control.
5.3 Pro Rata Eligibility Due to Death or Disability. In the event the Executive
ceases to be employed by the Company due to death or disability prior to the end of the Performance
Period, a pro rata number of shares of the Restricted Stock shall remain eligible for vesting at
the end of the Performance Period, such pro rata number to be measured by the number of days in the
period commencing with the date of this grant and ending on the date of death or disability as
compared to the number of days in the period commencing with the date of this grant and ending on
the last day of the Performance Period, with any fractional share rounded down to the nearest whole
number. The provisions of this Agreement, including those provisions relating to vesting only upon
attainment of the Performance Targets at the end of the Performance Period, shall continue to apply
to such pro rata number of shares. The balance of Restricted Stock granted pursuant to this
Agreement and not subject to pro rata eligibility pursuant to this Section 5.3 shall be forfeited
without compensation or other consideration.
5.4 Forfeiture upon Other Cessation of Employment. In the event the Executive ceases
to be employed by the Company prior to the end of the Performance Period for any reason other than
death or disability, 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 the Executive 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.
6. Tax Provisions.
Executive agrees that, no later than the date upon which the Restricted Stock becomes vested
in accordance with this Agreement, the Executive (or the Executive’s representative) 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.
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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.
This Agreement is not intended to have any effect upon Executive’s employment relationship
with the Company. Nothing in this Agreement shall interfere with or affect the rights of the
Company or the Executive under any employment agreement or confer upon the Executive any right to
continued employment with the Company.
10. Transferability; Binding Effect.
The rights of the Executive under this Agreement shall not be transferable except, in the
event of death, by will or by the laws of descent and distribution. 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.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written.
| OM GROUP, INC. | ||||||
| By | ||||||
| EXECUTIVE | ||||||
| [Name] | ||||||
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