RESTRICTED STOCK AND IRREVOCABLE PROXY AGREEMENT
This Restricted Stock and Irrevocable Proxy Agreement (the
"Agreement") is made and entered into January 19, 1999 by and among CFC
International, Inc. a Delaware corporation (the "Company"), Xxxxx X. Xxxxx
("Xxxxx") and Xxxxxxx X. Xxxxxxxxxx (the "Employee").
Recitals
The Employee has accepted a position as the Company's President and
Chief Operating Officer. In connection with his employment, the Company has
agreed to grant to him certain shares of common stock, $.01 par value per share
("Common Stock"), of the Company, subject to the terms and conditions and
restrictions set forth in this Agreement. At the same time, Xxxxx and the
Employee wish to provide for the manner in which such shares of Common Stock
will be voted.
Covenants
NOW THEREFORE, for good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. Restricted Stock.
1.1 Grant. The Company hereby grants to the Employee an award of
restricted stock ("Restricted Shares") consisting of 50,000 shares of the
Company's Common Stock. Subject to the provisions of this Agreement, the
Restricted Shares shall vest in equal installments, 25% on the date of this
Agreement, 25% on the first anniversary hereof, 25% on the third anniversary
hereof and 25% on the fourth anniversary hereof.
1.2 Certificates and Legend. The grant shall be evidenced by four stock
certificates each representing 12,500 shares of Common Stock, which shall be
retained by the Company until the restrictions lapse or otherwise as hereinafter
set forth. The shares of Common Stock shall be registered in the name of the
Employee. Each such certificate shall bear a legend in the following form:
"The Shares of Common Stock of CFC International, Inc.
represented by this Certificate have not been registered under
the Securities Act of 1933, as amended (the "Act") and may not
be offered or sold unless registered or pursuant to an
exemption from registration under the Act and any applicable
state securities laws."
1.3 Restrictions. The Employee shall have all rights of a holder as to
the Restricted Shares, including the right to receive cash dividends, to
exercise rights, and to vote, subject to the provisions of this Agreement, such
shares of Common Stock and any securities issued upon the exercise of such
rights, subject to the following restrictions: (a) the Employee shall not be
entitled to delivery of a certificate representing such shares, including
certificates issued as a result of stock dividends paid, and any other such
securities issued upon the exercise of such rights, until such shares vest, (b)
none of the Restricted Shares may be sold, transferred, assigned, pledged, or
otherwise encumbered or disposed of prior to the time that such Restricted
Shares vest, and (c) any unvested Restricted Shares will be forfeited and all of
the Employee's rights to such unvested Restricted Shares will terminate without
further obligation on the part of the Company if the Employee's employment with
the Company terminates except as provided in Section 1.5 hereof. Any shares of
Common Stock or other securities or property received with respect to such
Restricted Shares are subject to the same restrictions as the Restricted Shares.
1.4 Effect of Vesting. As the Restricted Shares vest, the restrictions
set forth in Section 1.3 above shall lapse as to the vested Restricted Shares,
and one or more certificates for the appropriate number of vested shares of
Common Stock shall be delivered to the Employee.
1.5 Employment Termination. If the Employee's employment is terminated
by the Company following a "Change in Control", any unvested Restricted Shares
shall immediately vest. Upon a termination of the Employee's employment for any
other reason, the Employee shall immediately forfeit all unvested Restricted
Stock granted hereunder. For purposes of this Agreement, a Change in Control
shall mean the acquisition of at least 50.1% of the power to vote for directors
of the Company by any person other than Xxxxx X. Xxxxx, his affiliates or
members of his family. If, following a Change in Control, the Employee resigns
from the Company as the result of a significant decrease in the nature or scope
of the Employee's authority or duties, a reduction in his compensation or a
Company requirement that he relocate, the resignation shall be treated as a
termination and any unvested Restricted Shares shall immediately vest.
1.6 Tax Matters. The Company understands that under existing federal
tax law (i) no income will be recognized to the Employee at the time of the
grant of the Restricted Shares except with respect to the 25% of the Restricted
Shares that vest on the date hereof and (ii) upon receipt by the Employee of the
shares of Common Stock covered by the grant following the expiration of or lapse
of the restrictions on Restricted Shares, Employee will be required to treat as
ordinary income the fair market value of the shares of Common Stock on the date
such shares are received by the Employee and the Company will be entitled to a
deduction equal to such amount. The Company may require the Employee to pay to
the Company, in such manner and under such conditions as the Company may
specify, an amount equal to the amount of tax the Company is required to
withhold as a result of the receipt of the shares of Common Stock by the
Employee.
2. Proxy and Directive.
2.1 Proxy. The Employee agrees to and does hereby grant to Xxxxx X.
Xxxxx, personally, pursuant to the provisions of Section 212 of the Delaware
General Corporation Law, an irrevocable proxy to vote, or to execute and deliver
written consents or otherwise act in the capacity of a stockholder with respect
to, all of the Restricted Shares owned by the Employee, whether or not vested,
to the same extent and with the same effect as the Employee might or could do
under any applicable laws or regulations governing the rights and powers of
stockholders of a Delaware corporation on any subject on which the stockholders
of the Company shall have a right to vote or otherwise take action.
2.2 Voting. This Proxy and Directive shall constitute an order to the
record owner and any other person authorized to vote any shares to which the
Proxy and Directive applies requiring such record owner or other person to
execute and delivery appropriate proxies and consents as Xxxxx shall have
directed to them in writing.
2.3 Proxy With Interest. The Employee hereby affirms that this
Proxy and Directive is coupled with an interest and is irrevocable.
3. Pledges, Donees and Assigns.
This Agreement (including without limitation the Proxy and Directive
contained herein) shall remain in full force and effect and be enforceable
against any pledgee, donee, transferee or assignee of the shares of Common Stock
of the Employee but the provisions of Sections 2.1, 2.2 and 2.3 shall terminate
with respect to any shares sold in a bona fide transfer to an unrelated third
party and shall also terminate at the death of Xxxxx X. Xxxxx.
4. Miscellaneous.
4.1 Amendment and Modification. The parties hereto may amend, modify
and supplement this Agreement in such manner as may be agreed upon by them in
writing.
4.2 Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and permitted
assigns, but neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned, by operation of law or otherwise, by
any of the parties hereto without the prior written consent of the other party.
4.3 Headings. The descriptive headings in this Agreement are inserted
for convenience only and do not constitute a part of this Agreement.
4.4 Execution in Counterpart. This Agreement may be executed in
counterparts each of which may deemed an original.
4.5 Notices. Any notice, request, information or other document to be
given hereunder to any of the parties by any other parties shall be in writing
and delivered personally or sent by Federal Express or other reliable courier,
transmitted by fax, or sent by registered or certified mail, postage prepaid, to
the intended recipient, at his address in the records of the Company. Any such
notice delivered personally shall be deemed to have been given on the date that
it is so delivered, and any notice delivered by other means referred to above
shall be deemed to have been given on the date it is received. Any party may
change the address to which notices hereunder are to be sent to it by giving
written notice of such change of address in the manner herein provided for
giving notice.
4.6 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware applicable to contracts made
and to be performed therein, without regard to the conflicts of laws principles
thereof.
4.7 Complete Agreement. The terms and conditions contained in this
Agreement constitute the sole obligations of the Company as to the subject
matter hereof, superseding any and all prior written and prior or
contemporaneous oral agreements of understandings.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
CFC INTERNATIONAL, INC.
By:
Title:
/s/ Xxxxx X. Xxxxx
Xxxxx X. Xxxxx
/s/ Xxxxxxx X. Xxxxxxxxxx
Xxxxxxx X. Xxxxxxxxxx
