EXHIBIT 2
RESTRICTED STOCK AGREEMENT
AGREEMENT dated this 20th day of August, 1998, by and between AMP
Incorporated, a Pennsylvania corporation with its principal offices located in
Harrisburg, Pennsylvania ("AMP") and Xxxxxx X. Xxxx, of Harrisburg, Pennsylvania
("Xxxx").
WHEREAS, Xxxx has been appointed as of the date hereof to the positions of
Chairman of the Board and Chief Executive Officer of AMP and, in connection with
such appointment, AMP has agreed to make the grant of restricted stock on the
terms set forth herein;
WHEREAS, both AMP and Xxxx desire to set forth in writing the nature of the
above described grant of restricted stock and its contractual limitations.
NOW THEREFORE, in consideration of the mutual covenants and obligations
hereinafter set forth, and intending to be legally bound hereby, the parties
hereto agree as follows:
1. GRANT.
1.1. AMP hereby grants to Xxxx 25,000 shares of common stock of AMP,
subject to the restrictions set forth under Sections 2 and 3 hereof
(the "Shares"). The Shares distributed to Xxxx hereunder will be
issued shares reacquired on the open market by and held in the
treasury of AMP. No Shares distributed pursuant to this Agreement
will have been registered under the Securities Act of 1933, as
amended (the "Securities Act"). The Shares include the 25,000 shares
granted hereunder, as adjusted in the event of any subsequent stock
dividend, dividend reinvestment, recapitalization, merger,
consolidation, split-up, combination, exchange of shares or similar
event.
2. RESTRICTIONS.
2.1. The Shares are subject to the following restrictions:
x. Xxxx'x ownership of the Shares shall vest on August 1, 2006 (his
normal retirement date), or on the date of Xxxx'x earlier death,
disability or other termination of Xxxx'x employment with AMP
that is mutually agreed upon by the parties.
b. Any Shares not vested as of the date of Xxxx'x death,
disability, retirement or other mutually agreed upon termination
of employment with AMP shall be forfeited and promptly returned
to AMP without further consideration. For purposes of this
Agreement, termination of employment means the termination of
employment by AMP or by a subsidiary of AMP, but not the
transfer of employment from AMP to a subsidiary or vice versa,
or from one subsidiary of AMP to another such subsidiary. For
purposes of this Agreement, employment shall not be considered
as terminated if Xxxx continues to perform services for AMP or a
subsidiary thereof on either a full or part-time basis either as
an independent contractor or on a consulting basis or otherwise,
provided, however, that Xxxx during such period does not,
whether full time or part time, engage in or perform any
services as an employee, independent contractor, consultant,
advisor or otherwise for a business that is engaged in the
manufacture, sale or other disposition of a product or products
that are in competition to a product or products of AMP or its
subsidiaries, partnerships or joint ventures.
c. Except as provided hereafter, no Shares may be transferred by
Xxxx prior to the vesting of such shares as set forth in Section
2.1(a) above. "Transferred" means any change of ownership of a
Share, including without limitation being sold, assigned,
exchanged, gifted or granted, pledged or hypothecated.
3. COMPLIANCE WITH SEC REGULATIONS.
3.1. Separate and apart from the restrictions contained in Section 2
hereof, the Federal securities laws and the rules and regulations
thereunder impose certain restrictions on the resale, reoffer or
other disposition of shares of
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AMP common stock that are unregistered under the Securities Act
and/or are held by persons who are "affiliates" of AMP, as that term
is defined in Rule 405 promulgated under the Securities Act. In view
of the fact that the grant of Shares under this Agreement consists of
unregistered AMP common stock and, further, because Xxxx is an
"affiliate" of AMP, an effective registration statement must be filed
under the Securities Act covering the resale or reoffer of the
Shares, or he must comply with the requirements of Rule 144 under the
Securities Act before he can publicly sell or reoffer the Shares, or
he must otherwise rely on one of the other exemptions from
registration that may be available. None of the provisions of this
Agreement shall relieve Xxxx of his obligations to comply with
applicable Federal and state securities laws in connection with the
Shares and transactions related to the Shares.
4. LEGENDS.
4.1. Each certificate evidencing the Shares shall bear three legends in
the following forms:
a. "The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the
"Act"), or under the securities laws of any state. These shares
may not be sold, offered for sale, transferred, pledged or
hypothecated in the absence of an effective registration
statement for the shares under the Act and applicable state
securities laws, or an opinion of counsel and other assurances
satisfactory to AMP Incorporated, prior to the transaction, that
registration is not required under the Act or under the
securities laws of any state."
b. "The registered holder of the shares represented by this
certificate may, at the time of issuance thereof, be deemed an
affiliate of the issuer under the Securities Act of 1933, as
amended."
c. "The shares represented by this certificate are subject to, and
may not be transferred except in compliance with, a Restricted
Stock Agreement dated August 20, 1998 between AMP Incorporated
and Xxxxxx X. Xxxx. These shares are subject to forfeiture in
the event of a breach of the terms and conditions of said
Restricted Stock Agreement. A copy of that Agreement is
available without cost from
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AMP Incorporated, Harrisburg, Pennsylvania."
4.2. In order to facilitate any sale or other disposition of the Shares by
Xxxx to persons entitled to take the Shares free and clear of the
restrictions of this Agreement, AMP agrees to promptly issue, in
exchange for legended certificates for the Shares, unlegended
certificates upon written request therefor from Xxxx. Any such
request shall contain a representation in reasonable detail that the
Shares represented by such legended certificates are being
transferred in conformance with the terms of this Agreement.
5. TAX WITHHOLDING.
5.1. AMP may deduct from any payment to be made to Xxxx any amount that
Federal, state, local or foreign tax laws requires to be withheld
with respect to the Shares upon the vesting of, or the lapse of
restrictions on, all or any part of the Shares. As additional methods
of accomplishing such withholding, Xxxx may elect to have AMP
withhold from the Shares, or he may surrender previously acquired
shares of common stock, in a number of whole shares up to but not
exceeding that number that has a then-current fair market value
sufficient to cover the amount of taxes required to be withheld at
such time.
6. WAIVER OF SECTION 83(B) ELECTION.
6.1. Xxxx acknowledges his knowing waiver of his right under Section 83(b)
of the Internal Revenue Code of 1986, as amended, to elect to have
the Shares treated as taxable income for the calendar year 1998, the
year in which the Shares were received by Xxxx, which tax would have
been based on the fair market valuation of the Shares as of the date
of the grant of the Shares to Xxxx.
7. DIVIDENDS.
7.1. Cash dividends paid on the Shares shall, at the election of Xxxx,
either be paid directly to Xxxx or be automatically reinvested in
additional shares of AMP common stock under AMP's Enhanced Dividend
Reinvestment Plan. Any such additional shares, together with any
stock dividends paid on the Shares, shall not be subject to the
terms, conditions and restrictions set
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forth in this Agreement and shall be acquired by Xxxx notwithstanding
that the Shares with respect to which such dividend was paid may have
been forfeited under the terms of this Agreement prior to the payment
date for such dividend.
8. STOCK POWER.
8.1. Upon the request of AMP from time to time, Xxxx agrees to execute and
deliver to AMP one or more stock powers in such form as may be
specified by the Corporate Secretary of AMP, authorizing the transfer
of the Shares to AMP.
9. GOVERNING LAW.
9.1. This Agreement shall be governed by and construed in all respects in
accordance with the laws of the Commonwealth of Pennsylvania and
applicable Federal law.
10. SEVERABILITY.
10.1. In the event any one or more of the provisions, or portions thereof,
contained or referenced in this Agreement shall for any reason be or
be deemed to be invalid, illegal or unenforceable, such provision
shall be construed or deemed amended to conform to applicable laws,
or if it cannot be so construed or deemed amended without materially
altering the intent of the Agreement, such provision shall be
stricken and the remaining provisions shall continue in full force
and effect and be construed as if such provision, to the extent it is
invalid, illegal or unenforceable, had never been contained herein.
11. NON-WAIVER.
11.1. The failure of any party to enforce the provisions hereof or to
exercise the rights granted hereunder, or the Agreement of the
parties to waive enforcement thereof, at any time or for any period
of time shall not constitute or be construed to be a waiver of any
other failure or breach of
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such provisions or rights, or any other provision of this Agreement,
or of the right of such party thereafter to enforce each and every
such provision or right, nor shall such failure or agreement be
deemed to be an amendment to this Agreement. Each waiver under this
Agreement shall be express and in writing.
12. NOTICES.
12.1. Any notice or demand hereunder or under statute, to be effective,
must be in writing and delivered personally or sent to telegram,
facsimile, express carrier or other delivery that provides a written
confirmation, or by certified or registered mail, postage or other
expenses prepaid, to:
AMP at: Corporate Secretary
AMP Incorporated
X.X. Xxx 0000
X/X 000-00
Xxxxxxxxxx, XX 00000
Xxxx at: Xxxxxx X. Xxxx
AMP Incorporated
X.X. Xxx 0000
X/X 000-00
Xxxxxxxxxx, XX 00000
The above addresses may be changed at any time by giving prompt
written notice as provided above.
13. SUCCESSORS.
13.1. This Agreement shall be binding on the heirs, executors,
administrators and successors of the parties hereto.
14. COUNTERPARTS.
14.1. This Agreement may be executed in one or more counterparts, each of
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which shall be deemed an original but all of which together shall
constitute but one and the same Agreement.
15. ENTIRE AGREEMENT.
15.1. This Agreement represents the entire understanding and agreement
between the parties hereto with respect to the subject matter hereof
and supersedes all prior agreements and understandings either written
or oral. This Agreement may be modified or amended only by an
instrument in writing duly executed by Xxxx and an authorized
representative of AMP.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.
AMP INCORPORATED
By: ______________________ By: ________________________
[Title] Xxxxxx X. Xxxx
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