EXHIBIT (10)(a)
XXXXXXXX XXXXX, INC.
RESTRICTED STOCK AGREEMENT
THIS RESTRICTED STOCK AGREEMENT is entered into this 27th day of May,
1997, by and between Xxxxxxxx Xxxxx, Inc. (the "Company") and ____________ (the
"Executive").
WITNESSETH:
WHEREAS, the Company has approved the grant of restricted stock to the
Executive pursuant to the terms and conditions of the Company's 1989 Restricted
Stock Plan (the "Plan").
NOW, THEREFORE, the Company and the Executive hereby agree as follows:
1. Restricted Stock Award. Subject to the terms and conditions of the
Plan and this Agreement, the Company hereby awards to the Executive _________
shares of Company Common Stock, par value $.02 per share, the vesting of which
shall be subject to the Executive's continued employment with the Company or a
Subsidiary, as defined in the Plan, as described below (the "Restricted Stock").
2. Restrictions. The following restrictions apply to each share of
Restricted Stock until it vests in accordance with Section 3 below: (i) one or
more stock certificates representing the Restricted Stock will be issued in the
Executive's name, but will be held in custody by the Company or an escrow agent
appointed by the Company; (ii) the Executive shall not sell, transfer, assign,
give, place in trust, or otherwise dispose of or pledge, grant a security
interest in, or otherwise encumber the Restricted Stock; (iii) dividends on the
Restricted Stock will be subject to the provisions set forth in Section 4 below;
and (iv) upon termination of the Executive's employment with the Company or a
Subsidiary for any reason whatsoever the Executive shall automatically forfeit
any and all rights, claims or interests in the Restricted Stock not then vested,
and in any dividends or interest thereon, unless the Compensation Committee of
the Company's Board of Directors determines otherwise in its sole and absolute
discretion, except that if the Executive's employment with the Company or a
Subsidiary is terminated Without Cause, as hereinafter defined in Section 11, or
by reason of death or disability, then the Executive, or his estate, as the case
may be, shall become vested in the Restricted Stock, and all dividends and
interest paid thereon, on the date of such termination.
3. Vesting of Restricted Stock. The Executive shall vest in _______
shares of Restricted Stock on the date hereof and, subject to the Executive's
continuous employment with the Company or a Subsidiary from and after the date
of this Agreement,
the Executive shall become vested in _______ shares of Restricted Stock on each
of May 27, 2001, May 27, 2002, May 27, 2003 and May 27, 2004 (each such date a
"Vesting Date").
4. Dividends. Dividends on each share of Restricted Stock shall be paid
to the escrow agent appointed by the Company. The escrow agent shall invest the
escrowed dividends and, to the extent the annual yield thereon is less than 9%,
the Company shall make payments to the escrow agent from time to time so that
dividends held in escrow shall be credited with interest at the rate of 9% per
annum, compounded annually. Earnings on escrowed dividends in excess of 9% per
annum shall be paid to the Company. The Executive shall be entitled to receive
the dividends paid on each share of Restricted Stock and held in escrow,
together with interest thereon at the rate of 9% per annum, at the same time he
becomes vested in that share of Restricted Stock under the vesting provisions
set forth in Section 3 above.
5. Change in Control. Notwithstanding the foregoing, if there is a
Change in Control of the Company (as defined in the Plan), all shares of
Restricted Stock not previously forfeited will immediate vest, and the Executive
shall be entitled to receive any dividends previously paid on the Restricted
Stock and then held in escrow, together with interest thereon, provided,
however, that in the event of any conflict between the provisions of this
Section and any other contract or arrangement between the Executive and the
Company relating to a Change in Control of the Company, the provisions of such
other contract or arrangement shall control.
6. Delivery of Restricted Stock; Voting. Subject to the provisions of
the Plan and this Agreement, upon the vesting of any shares of Restricted Stock,
the Executive shall thereupon become entitled to receive a stock certificate
evidencing such shares. The Executive shall have the right to vote Restricted
Stock issued in his name on all matters that come before the stockholders of the
Company.
7. Regulatory Compliance and Listing. The issuance or delivery of any
stock certificates representing vested shares of Restricted Stock may be
postponed by the Company for such period as may be required to comply with any
applicable requirements under the federal securities laws, any applicable
listing requirements of any national securities exchange and requirements under
any other law or regulation applicable to the issuance or delivery of such
shares. The Company shall not be obligated to deliver any vested shares of
Restricted Stock to the Executive if the Company believes that such delivery
would constitute a violation of any governmental authority or any national
securities exchange.
8. Investment Representations and Related Matters. The Executive hereby
represents that the Restricted Stock awarded him pursuant to this Agreement is
being acquired for investment and not for sale or with a view to distribution
thereof. The Executive acknowledges and agrees that any sale or distribution of
shares of Restricted Stock that have become vested may be made only pursuant to
either (a) a Registration
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Statement on an appropriate form under the Securities Act of 1933, as amended
(the "Act"), which Registration Statement has become effective and is current
with regard to the shares being sold, or (b) a specific exemption from the
registration requirements of the Act that is confirmed in a favorable written
opinion of counsel, in form and substance satisfactory to counsel for the
Company, prior to any such sale or distribution. The Executive hereby consents
to such action as the Company deems necessary or appropriate from time to time
to prevent a violation of, or to perfect an exemption from, the registration
requirements of the Act or to implement the provisions of this Agreement,
including but not limited to placing restrictive legends on certificates
evidencing shares of Restricted Stock (whether or not vested) and delivering
stop transfer instructions to the Company's transfer agent.
9. Withholding. The Executive acknowledges that the Company will have
certain withholding obligations when he becomes vested in shares of Restricted
Stock. It shall be a condition to his receipt of a stock certificate covering
shares of Restricted Stock that have vested and to his receipt of dividends
previously paid on such shares and interest thereon that the Executive pay to
the Company such amounts as it is required to withhold or, with the consent of
the Company, otherwise provide for the discharge of the Company's withholding
obligations. If any such payment is not made by the Executive, the Company or
any Subsidiary may deduct the amounts required to be withheld, plus interest
thereon, from payments of any kind to which the Executive would otherwise be
entitled.
10. No Right To Continued Employment. This Agreement does not confer
upon the Executive any right to continued employment by the Company or any
Subsidiary or affiliated company, nor shall it interfere in any way with the
right of the Executive's employer to terminate his employment at any time for
any reason or no reason.
11. Restrictive Covenants.
(a) The Executive acknowledges that by virtue of his position
with Guilford, as defined herein, he has had and will continue to have access at
the highest level to, and intimate knowledge of, valuable confidential and
proprietary information relating to Guilford's businesses including, without
limitation, Guilford's trade secrets. Accordingly, in consideration of the
Restricted Stock award evidenced by this Agreement, which award the Executive
acknowledges is being made in the Company's discretion, the Executive hereby
undertakes and covenants that at all times during the continuation of his
employment with Guilford and during the Restrictive Period, as defined herein,
he shall:
(i) refrain, alone, or as a partner, member, employee
or agent of any partnership, or as an officer, employee, agent, director,
stockholder or investor (except as to not more than 5% of the outstanding stock
of any corporation, the securities of which are traded on a securities exchange
or in the over-the-counter market) of any
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corporation, or in any other individual or representative capacity, from
directly or indirectly owning, managing, operating or controlling, or
participating in the ownership, management, operation or control of, or working
for or providing consulting services to, or permitting the use of his name by,
any business or activity in competition with Guilford's Business, as defined
herein, within the Territory, as defined herein (the foregoing clause shall
prohibit, among other activities, soliciting or accepting the business of, for
himself or others (other than for Guilford), any person or entity which is a
customer of Guilford's Business within the Territory); and
(ii) refrain, without first obtaining the written
consent of Guilford, from directly or indirectly soliciting, enticing,
persuading, inducing or hiring any employee, consultant, agent, independent
contractor or other person (other than secretarial and clerical personnel) who
is employed by Guilford on the date the Executive's employment with Guilford
terminates or who has been employed by Guilford during the 12 month period
preceding such date to become employed by any person, firm, entity or
corporation or approach any such person for any of the foregoing reasons.
The term "Business" shall mean (i) the business
(which the Executive acknowledges Guilford is engaged in as of the date hereof)
of developing, knitting, weaving, dyeing and finishing, designing, printing or
marketing yarns, fabrics or lace for any of the following applications:
automotive (including, without limitation, headliner and bodycloth fabric for
cars, vans, sport utility vehicles, trucks and other passenger vehicles),
apparel (including, without limitation, linings, swimwear, intimate apparel,
activewear, outerwear, sleepwear, robewear, ready-to-wear and shapewear),
upholstery, home furnishings or industrial (including, without limitation, "hook
and loop" fastening systems, medical and health care products, component parts
of shoes and carpet backings) and (ii) any other business in which Guilford
becomes engaged during the Executive's employment with Guilford.
The term "Territory" shall mean the United States of
America, its territories and possessions, Europe, the United Kingdom, the
Republic of Mexico, Brazil, Argentina, Japan and Canada; PROVIDED, HOWEVER, that
if the area described in the preceding clause shall be determined by judicial
action to define too broad a territory to be enforceable, then the term
"Territory" shall mean the United States of America, its territories and
possessions, the Republic of Mexico and Canada; and, PROVIDED FURTHER, that if
the area described in the immediately preceding clause shall be determined by
judicial action to define too broad a territory to be enforceable, then the term
"Territory" shall mean the United States of America, its territories and
possessions; and, PROVIDED FURTHER, that if the area described in the
immediately preceding clause shall be determined by judicial action to define
too broad a territory, then the term "Territory" shall mean those states in the
United States of America in which Guilford maintains operations at which it
conducts the Business. The Executive hereby acknowledges that Guilford's
Business is national and international in scope and that Guilford has customers
throughout the United States of America, its territories and possessions, the
Republic of Mexico, Canada, the United Kingdom, Europe and throughout other
parts of the world.
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Accordingly, the Executive acknowledges and agrees that the scope of the
covenants in this Section 11 are reasonable and necessary in order to protect
the interests of Guilford's Business sought to be protected hereby.
The term "Cause" shall mean, as determined by the
Board of Directors or the Compensation Committee, as the case may be, in its
sole discretion, (i) the willful commission by the Executive of an act that
causes or may cause substantial damage to Guilford, (ii) the commission by the
Executive of an act of fraud in the performance of his duties on behalf of
Guilford, (iii) conviction of the Executive for commission of a felony in
connection with the performance of his duties on behalf of Guilford, or (iv) the
continuing failure of the Executive to perform his duties to Guilford after
written notice thereof and a reasonable opportunity to be heard and cure such
failure are given to the Executive by the Board of Directors or the Compensation
Committee, as the case may be.
The term "Without Cause" shall mean termination of
the Executive's employment by Guilford for reasons other than Cause.
The term "Guilford" shall mean the Company or any of
its Subsidiaries, affiliated companies, successors or assigns.
The term "Restrictive Period" shall mean a period of
two years following the Executive's voluntary termination of his employment with
Guilford or the termination of his employment by Guilford for Cause.
(b) Recognizing that the knowledge of Guilford's customers,
suppliers, agents, business methods, systems, plans, policies, trade secrets,
knowledge, know-how, information, materials or documents are valuable and unique
assets, the Executive agrees that he shall not divulge, furnish or make
accessible to any person, firm, corporation or other entity (other than as is
necessary and appropriate in the regular course of Guilford's Business) for any
reason or purpose whatsoever, directly or indirectly, or use for the benefit of
himself or others (other than for Guilford's benefit), any such knowledge or
information. The provisions of this Section 11(b) shall not apply to information
which is or shall become generally known to the public (except by reason of the
Executive's breach of his obligations hereunder) and information which the
Executive is required to disclose by law or by an order of a court of competent
jurisdiction. If the Executive is required by law or a court order to disclose
such information, he shall notify Guilford of such requirement and provide
Guilford an opportunity (if it so elects) to contest such law or court order.
(c) The Executive acknowledges that all developments,
including, without limitation, inventions, patentable or otherwise, discoveries,
improvements, patents, trade secrets, designs, reports, computer software, flow
charts and diagrams, procedures, data, documentation, ideas and writings and
applications thereof relating to Guilford's Business or planned business of
Guilford that, alone or jointly with others, the
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Executive may conceive, create, make, develop, reduce to practice or acquire
during his employment with Guilford (collectively, the "Developments") are works
made for hire and shall remain the sole and exclusive property of Guilford and
the Executive hereby assigns to Guilford all of his right, title and interest in
and to all such Developments. The Executive agrees that he will, at any time
upon request and at the expense of Guilford, promptly execute all instruments
and papers and perform all acts whatsoever, which are necessary or desired by
Guilford to vest and confirm in Guilford, and its successors, assigns and
nominees, fully and completely, all rights created by this section and which may
be necessary or desirable to enable Guilford, and its successors, assigns and
nominees, to secure and enjoy the full benefits and advantages thereof.
(d) In the event of any breach or threatened breach of the
provisions of this Section 11 by the Executive, Guilford, in addition to any
other rights and remedies it may have, shall be entitled to an injunction
(and/or other equitable relief) restraining such breach or threatened breach, it
being stipulated and agreed that a breach by the Executive would cause
irreparable damage to Guilford and that its remedies at law would be inadequate.
The existence of any claim or cause of action on the part of the Executive
against Guilford shall not constitute a defense to the enforcement of these
provisions. The Executive agrees that the terms of the foregoing covenants,
including, without limitation, the Restrictive Period and the Territory, are
reasonable in all respects and necessary for the protection of Guilford, and
represents and warrants to Guilford that he will be able to support himself and
his dependents notwithstanding the covenants. If any court of competent
jurisdiction shall finally adjudicate that any of the covenants provided for
herein are too broad as to area, activity or time covered, such area, activity
or time covered may be reduced to whatever extent the court deems reasonable and
the covenants herein and the remedy of injunctive and/or other equitable relief
may be enforced as to such reduced area, activity or time.
12. Miscellaneous.
(a) The Plan and this Agreement shall be construed by and
administered under the supervision of the Compensation Committee of the Board of
Directors of the Company, and all determinations of the Compensation Committee
shall be final and binding on the Executive.
(b) Nothing in the Plan or this Agreement will restrict or
limit in any way the right of the Board of Directors of the Company to issue or
sell stock of the Company (or securities convertible into stock of the Company)
on such terms and conditions as it deems to be in the best interests of the
Company, including, without limitation, stock and securities issued or sold in
connection with mergers and acquisitions, stock issued or sold in connection
with any stock option or similar plan, and stock issued or contributed to any
qualified stock bonus or employee stock ownership plan.
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(c) The Executive hereby irrevocably constitutes and appoints
Xxxxxxxx X. Xxxxxxxx and Xxxxxxx X. Xxxxx, or either of them, as his true and
lawful agents and attorneys in fact, with full power to appoint a substitute or
substitutes to act hereunder, (i) to sign in his name and on his behalf, stock
certificates and stock powers covering some or all of the Restricted Stock,
checks and other negotiable instruments evidencing dividends paid on the
Restricted Stock, and to sign such other documents and instruments and to take
such other action as either of the attorneys-in-fact deems necessary or
desirable to carry out the terms of this Agreement; (ii) to transfer shares of
Restricted Stock in accordance with the terms of this Agreement; and (iii) to
deposit, invest, reinvest and transfer, in accordance with the terms of this
Agreement, dividends paid on the Restricted Stock and interest thereon. This
power, being coupled with an interest, is irrevocable. The Executive agrees to
execute such other stock powers and documents as may be reasonably requested
from time to time by the Company to effectuate the terms of this Agreement.
(d) The Executive hereby agrees to be bound by all of the
terms and provisions of the Plan, as amended, a copy of which is available to
him upon request.
(e) Any notice to be given hereunder shall be given in writing
by hand delivery or sent by overnight courier or registered or certified mail,
return receipt requested, postage prepaid, addressed to the party to receive the
same at his or its respective address as follows: if to the Company, at its
principal offices, 0000 Xxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000,
Attention: Law Department; and if to the Executive, at his current address as
reflected in the personnel records of the Company, subject to the right of
either party to designate at any time hereafter in writing some other address.
(f) This Agreement may be executed in counterparts, each of
which taken together shall constitute one and the same instrument.
(g) In case any one or more of the provisions of this
Agreement should be found to be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein shall not in any way be affected or impaired thereby.
(h) No failure by either party hereto to exercise and no delay
in exercising, any right hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise of any right hereunder by either party preclude
any other or future exercise of that right or any other right hereunder by that
party.
(i) This Agreement may not be amended, terminated or suspended
except by an agreement in writing between the Company and the Executive.
(j) This Agreement, which constitutes the entire agreement of
the parties with respect to the Restricted Stock, shall be governed by, and
construed and
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enforced in accordance with, the laws of the State of Delaware. The provisions
of Section 11 of this Agreement supersede any and all prior similar covenants
contained in any agreement entered into prior to the date hereof between the
Executive and the Company. Any controversy or dispute arising out of or relating
to this Agreement shall be settled exclusively in the courts (federal and state)
situated in the State of North Carolina, Guilford County. The Executive consents
to personal jurisdiction in the State of North Carolina and in the courts
thereof for the enforcement of this Agreement and waives any rights he may have
under the law of any jurisdiction to object on any basis (including, without
limitation, inconvenience of forum) to jurisdiction or venue within the State of
North Carolina for purposes of litigation to enforce this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
XXXXXXXX XXXXX, INC.
By:__________________________
Name:________________________
Title:_________________________
_____________________________
[Name of Executive]
