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EXHIBIT 10.3
KENNAMETAL INC.
RESTRICTED STOCK AGREEMENT
DATE OF GRANT: MAY 4, 1999
THIS AGREEMENT made by and between KENNAMETAL INC., a Pennsylvania
corporation (hereinafter called the "Company"), and Xxxxxx X. Xxxxxxxxxx
(hereinafter called the "Employee") is made as of the above date under the
Kennametal Inc. 1999 Stock Plan (the "Plan").
WHEREAS, pursuant to the provisions of the Company's Plan, the
Committee on Executive Compensation of the Company's Board of Directors (the
"Compensation Committee") has taken action effective April 26, 1999, pursuant to
which action Employee became eligible to receive a restricted stock grant for
83,000 shares of the $1.25 Par Value Capital Stock (the "Shares"), in accordance
with the Plan and as more particularly provided herein.
WITNESSETH:
1. Tendered to Employee herewith is a copy of a certificate for the
Shares registered in the name of Employee.
2. The Shares may not be sold, assigned, pledged, exchanged,
hypothecated or otherwise transferred, encumbered or disposed of, except as
described in the Plan, to the extent then subject to the Forfeiture Restrictions
(as hereinafter defined), and in the event of termination of Employee's
employment with the Company or employing subsidiary (i) for Cause (as defined in
Optionee's Executive Employment Agreement dated the date hereof) or (ii) in
violation of an agreement by Employee to remain in the employ of the Company or
one of its subsidiaries, Employee shall, for no consideration, forfeit to the
Company all Shares to the extent then subject to the Forfeiture Restrictions.
The prohibition against transfer and the obligation to forfeit and surrender
Shares to the Company upon termination of employment are herein referred to as
"Forfeiture Restrictions." The Forfeiture Restrictions shall be binding upon and
enforceable against any transferee of Shares.
3. The Forfeiture Restrictions shall lapse as to the Shares in
accordance with the following schedule provided that Employee has been
continuously employed by the Company from the date of this Agreement through the
lapse date:
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a. One-third of the shares shall become vested and no longer
subject to a risk of forfeiture eight (8) months after July 1,
1999.
b. The second one-third of the Shares shall vest and no longer be
subject to a risk of forfeiture sixteen (16) months after July
1, 1999.
c. The third one-third of the shares shall vest and no longer be
subject to a risk of forfeiture twenty-four (24) months after
July 1, 1999.
4. In no case will this Agreement result in Employee being vested in
(or becoming eligible to become vested in) more than a total of 83,000 Shares.
5. At such time as any Shares vest under this Agreement, the Company
shall cancel the certificate referenced in paragraph 1, above (or any
certificate issued in its place), and issue two new certificates in place of the
canceled certificate, one to be delivered to Employee for the number of Shares
vested (reduced by any Shares withheld for taxes pursuant to Section 10 of the
Plan), and one to be retained by the Company pursuant to the terms hereof (with
a copy delivered to Employee), for the number of Shares remaining unvested
pursuant hereto. The Company shall not be obligated to issue or deliver any
Shares if the issuance or delivery thereof shall constitute a violation of any
provision of any law or of any regulation of any government authority or
national securities exchange.
6. The original of any certificate for unvested Shares issued pursuant
to this Agreement shall, until any of such shares become vested, remain in the
custody of the Office of the Treasurer of the Company.
7. Employee agrees that the Shares will not be sold or otherwise
disposed of in any manner which would constitute a violation of any applicable
federal or state securities laws. Employee also agrees (i) that the certificates
representing the Shares may bear such legend or legends as the Company deems
appropriate in order to assure compliance with applicable securities laws, (ii)
that the Company may refuse to register the transfer of the Shares on the stock
transfer records of the Company which constitute a violation of any applicable
securities law, and (iii) that the Company may give related instructions to its
transfer agent, if any, to stop registration of the transfer of the Shares.
8. In the event that any withholding for tax purposes is required or
elected upon vesting of any Shares pursuant to this Agreement and Section 10 of
the Plan, the Company will withhold in Shares that number of whole shares with a
fair market value which is as nearly equal to but less than the amount to be
withheld, and will remit in cash that the Fair Market Value of Shares so
withheld to satisfy such withholding requirements (along with any cash required
of Employee pursuant to Section 10 of the Plan).
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9. All Shares subject to this Agreement shall have become vested if at
all, on or before July 1, 2001 on which date this Agreement shall terminate and
any shares subject to this Agreement and unvested at the date shall, without any
action on the part of Employee, be transferred to the Company for its use and
ownership.
10. In addition to the vesting provisions stated in the Plan, the
Shares subject to this Agreement shall immediately vest upon termination of
Employee without Cause or upon Employee's termination of employment due to an
Employer's Breach, or upon a Change-in-Control, all as defined in Employee's
Executive Employment Agreement dated as of May 4, 1999.
11. For purposes of this Agreement, Employee shall be considered to be
in the employment of the Company as long as Employee remains an employee of
either the Company any successor corporation or a parent or subsidiary
corporation (as defined in section 424 of the Code) of the Company or any
successor corporation. Any question as to whether and when there has been a
termination of such employment, and the cause of such termination, shall be
determined by the Compensation Committee, or its delegate, as appropriate, and
its determination shall be final.
12. This Agreement shall be governed by and construed in accordance
with the laws of the Commonwealth of Pennsylvania.
13. Capitalized terms not defined in this Agreement have the meaning
assigned to them in the Plan.
Witness the signatures of the parties effective the day first written
above.
ATTEST: KENNAMETAL INC.
/s/ Xxxxx X. Xxxxx /s/ Xxxxxxx X. Xxxxxx
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Secretary Vice President
WITNESS:
/s/ Xxxxx Xxxxx /s/ Xxxxxx X. Xxxxxxxxxx
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Xxxxxx X. Xxxxxxxxxx
