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FORM OF XXX XXXXXXXXX, INC.
2000 STOCK INCENTIVE PLAN
RESTRICTED STOCK AGREEMENT
KEY ASSOCIATES PERFORMANCE SHARES (KAPS)
RESTRICTED STOCK AGREEMENT (the "Agreement"), dated as of
________, 2001 (the "Agreement Date"), between XXX XXXXXXXXX, INC., a Delaware
corporation (the "Company"), and ___________, an employee of the Company (the
"Grantee").
The Compensation Committee of the Board of Directors of the
Company (the "Committee") has determined that the objectives of the Company's
2000 Stock Incentive Plan (the "Plan") will be furthered by the grant to the
Grantee of _______ issued shares of Common Stock of the Company, par value $1.00
per share, currently held by the Company, subject to the terms, conditions and
restrictions set out in this Agreement (the "Restricted Shares"). The Restricted
Shares granted hereby have been designated by the Committee as Key Associates
Performance Shares (KAPS).
Notwithstanding any provision hereof, this Agreement shall
become effective only as, when and if the Grantee shall have delivered to the
Company an executed version of this Agreement and, if requested by the Company,
a stock power or stock powers duly endorsed in blank, which will be returned to
the Grantee when all restrictions on the Restricted Shares covered thereby have
expired as provided in Section 2.
In consideration of the foregoing and of the mutual
undertakings set forth in this Agreement, the Company and the Grantee hereby
agree as follows:
SECTION 1. Issuance of Restricted Shares. As soon as
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practicable after receipt from the Grantee of this executed Agreement, the
Company shall cause to be issued under the
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Plan in the name of the Grantee, either represented by a Restricted Share stock
certificate or book entry registration at the Company's transfer agent, that
number of shares of Common Stock set forth on the first page of this Agreement
as Restricted Shares. Such issuance shall be subject to this Agreement and the
restrictions set forth herein and in the Plan. No shares or certificates shall
be delivered to the Grantee until the Restricted Shares represented thereby are
free of the restrictions set forth in Section 2, as and to the extent provided
in this Agreement. Upon the issuance of Restricted Shares (whether through
certificates or book-entry registration), the Grantee shall have the rights of a
stockholder with respect thereto, subject to the restrictions set forth in this
Agreement and the Plan.
SECTION 2. Restrictions.
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2.1 Restricted Shares may not be sold, assigned, transferred,
pledged or otherwise encumbered or disposed of prior to the date provided for
vesting, as set out in Section 2.2 or 2.3. These restrictions shall apply as
well to any shares of Common Stock or other securities of the Company which may
be acquired by the Grantee in respect of the Restricted Shares as a result of
any stock split, stock dividend, combination of shares or other change, or any
exchange, reclassification or conversion of securities.
2.2 Unless sooner terminated pursuant to the terms hereof or
accelerated pursuant to Section 2.3, the restrictions set forth in Section 2.1
shall expire, provided that the Grantee is then an employee of the Company and
otherwise complies with the applicable provisions of this Agreement and the
Plan, on the date indicated below (a "Regular Vesting Date") with respect to the
applicable portion (indicated below) of the Restricted Shares:
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Portion of the
full number of
Regular Vesting Date Restricted Shares Then Vesting
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3rd Anniversary of Agreement Date 20%
4th Anniversary of Agreement Date 40%
5th Anniversary of Agreement Date 60%
6th Anniversary of Agreement Date 100%
2.3 Notwithstanding Section 2.2, the Restricted Shares shall
vest and be free of the restrictions set forth in Section 2.1 as follows: (a)
all of the remaining Restricted Shares shall vest upon the Grantee's termination
of employment with the Company on account of the death, disability (as defined
in the Plan) or retirement (as defined in the Plan, but on or after his or her
65th birthday) of Grantee, or (b) all or a portion of the remaining Restricted
Shares shall vest upon the publication of the audited financial statements for
the Company's 2003 fiscal year (the "Accelerated Vesting Date") in accordance
with Appendix A hereto, if, as and to the extent that the requisite combination
of the non-financial goals and financial goals set forth in such Appendix A
(collectively, the "Goals") shall have been achieved in whole or part. The
Grantee's achievement of the non-financial and financial Goals will each be
measured separately on a scale of 0 to 50 (for a total score of 0 to 100), as
determined by the Committee after consultation with the Company's Chief
Executive Officer ("CEO") after the Accelerated Vesting Date. The levels of
achievement as against such non-financial and financial Goals will then be
aggregated to determine the portion of Xxxxxxx's Restricted Shares entitled to
accelerated vesting under clause (b) above, in accordance with the provisions
set out on Appendix A. The Committee's determination of achievement as against
Goals shall be final and binding on Grantee.
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2.4 As soon as practical after a Regular or Accelerated
Vesting Date, the Company shall deliver to the Grantee, subject to the
provisions of Section 4, a stock certificate representing the Restricted Shares
which became vested on such Regular or Accelerated Vesting Date and shall modify
the certificate or book-entry registration referenced in Section 1, as
applicable, to reflect the number of Restricted Shares that remain subject to
restriction after such Regular or Accelerated Vesting Date.
2.5 Dividends that become payable on Restricted Shares shall
be held by the Company in escrow in accordance with the provisions of this
Agreement. In this connection, on each Common Stock dividend payment date while
any Restricted Shares remain outstanding and restricted hereunder (each, a "RS
Dividend Date"), the Company shall be deemed to have reinvested any cash
dividend otherwise then payable on the Restricted Shares in a number of phantom
shares of Common Stock (including any fractional share) equal to the quotient of
such dividend divided by the Fair Market Value of a share of Common Stock on
such RS Dividend Date and to have credited such shares to an unfunded book
account in the Grantee's name (the "Dividend Escrow Account"). As of each
subsequent RS Dividend Date, the phantom shares then credited to the Dividend
Escrow Account shall be deemed to receive a dividend at the then applicable
dividend rate, which shall be reinvested in the same manner in such Account in
the form of additional phantom shares. If any dividend payable on any RS
Dividend Date is paid in the form of Common Stock, then any such stock dividend
in respect of the Restricted Shares then subject to restriction shall be treated
as additional Restricted Shares under this Agreement, pursuant to Section 2.1
above, with such additional Restricted Shares being subject to the same vesting
and other restrictions as the Restricted Shares with respect to which such
dividends became payable, and with any fractional share being treated as a cash
dividend that is subject to
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the escrow and reinvestment procedures in this Section 2.5. Any other non-cash
dividends credited with respect to Restricted Stock shall be subject to the
escrow and reinvestment procedures in this Section 2.5, and shall be valued for
purposes of this Section 2.5 at the fair market value thereof as of the relevant
RS Dividend Date, as determined by the Committee in its sole discretion. At each
Regular or Accelerated Vesting Date, the Company shall deliver out of escrow to
the Grantee that number of shares of Common Stock equal to the number of phantom
shares then credited to the Dividend Escrow Account as the result of the deemed
investment and reinvestment in phantom shares of the dividends attributable to
the Restricted Shares on which restrictions lapse at such Regular or Accelerated
Vesting Date.
SECTION 3. Forfeiture. Except as provided in clause (a) of the
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first sentence of Section 2.3, effective upon termination of the Grantee's
employment with the Company for any reason, the Company, unless otherwise
determined by the Committee in its sole discretion, shall cancel the stock
certificate or book-entry registration representing any Restricted Shares on
which the restrictions have not expired, and the Dividend Escrow Account shall
thereupon be terminated, it being understood and agreed that Grantee shall not
be entitled to any payment whatsoever under this Agreement or provisions of the
Plan relating to this Agreement in connection with such cancellation and
termination.
SECTION 4. Withholding Taxes.
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4.1 Whenever a stock certificate representing Restricted
Shares that have vested in accordance with the terms hereof is to be delivered
to the Grantee pursuant to Section 2.4, the Company shall be entitled to require
as a condition of such delivery that the Grantee remit to the Company an amount
sufficient in the opinion of the Company to satisfy all federal, state and other
governmental tax withholding requirements related to the expiration of
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restrictions on the shares represented by such certificate. Instead, upon the
request of the Grantee, the Company may withhold from delivery shares having a
Fair Market Value on the Regular or Accelerated Vesting Date (whichever is
applicable) equal to the amount of tax to be withheld. Fractional share amounts
shall be settled in cash.
4.2 If the Grantee makes the election permitted under section
83(b) of the Internal Revenue Code (that is, an election to include in gross
income in the year of transfer the amounts specified in section 83(b)), Grantee
shall notify the Company of such election within 10 days of filing notice of the
election with the Internal Revenue Service and shall within the same 10-day
period remit to the Company an amount sufficient in the opinion of the Company
to satisfy all federal, state and other governmental tax withholding
requirements related to such inclusion in Grantee's income.
SECTION 5. Nature of Payments. The grant of the Restricted
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Shares hereunder is in consideration of services to be performed by the Grantee
for the Company and constitutes a special incentive payment and the parties
agree that it is not to be taken into account in computing the amount of salary
or compensation of the Grantee for the purposes of determining (i) any pension,
retirement, profit-sharing, bonus, life insurance or other benefits under any
pension, retirement, profit-sharing, bonus, life insurance or other benefit plan
of the Company, or (ii) any severance or other amounts payable under any other
agreement between the Company and the Grantee.
SECTION 6. Plan Provisions to Prevail. This Agreement is
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subject to all of the terms and provisions of the Plan. Without limiting the
generality of the foregoing, by entering into this Agreement the Grantee agrees
that no member of the Committee shall be liable for any action or determination
made in good faith with respect to the Plan or any award thereunder or
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this Agreement. In the event that there is any inconsistency between the
provisions of this Agreement and of the Plan, the provisions of the Plan shall
govern.
SECTION 7. Miscellaneous.
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7.1 Section Headings. The Section headings contained herein
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are for purposes of convenience only and are not intended to define or limit the
contents of the Sections.
7.2 Notices. Any notice to be given to the Company hereunder
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shall be in writing and shall be addressed to the Company's Vice President,
Finance, or Vice President of Financial Operations, at Xxx Xxxxxxxxx Xxxxxx,
Xxxxx Xxxxxx, XX 00000, or at such other address as the Company may hereafter
designate to the Grantee by notice as provided in this Section 7.2. Any notice
to be given to the Grantee hereunder shall be addressed to the Grantee at the
address set forth beneath his signature hereto, or at such other address as he
or she may hereafter designate to the Company by notice as provided herein. A
notice hereunder shall be deemed to have been duly given when personally
delivered or mailed by registered or certified mail to the party entitled to
receive it.
7.3 Successors and Assigns. This Agreement shall be binding
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upon and inure to the benefit of the parties hereto and the successors and
assigns of the Company and, to the extent consistent with Sections 2 and 3 of
this Agreement, the heirs and personal representatives of the Grantee.
7.4 Governing Law. This Agreement shall be interpreted,
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construed and administered in accordance with the laws of the State of Delaware
as they apply to contracts made, delivered and to be wholly performed in the
State of Delaware.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date and year first above written.
XXX XXXXXXXXX, INC.
By:_____________________________________
Xxxx X. Xxxxxxx
Chairman of the Board and Chief
Executive Officer
____________, Grantee
________________________________________
Address: _______________________________
________________________________________
Social Security Number:
