Exhibit 10.1
RESTRICTED STOCK AGREEMENT
UNDER THE THIRD AMENDED AND RESTATED
WESTWOOD HOLDINGS GROUP, INC. STOCK INCENTIVE PLAN
WHEREAS, WESTWOOD HOLDINGS GROUP, INC., a Delaware corporation (the
"Company"), previously established the Third Amended and Restated Westwood
Holdings Group, Inc. Stock Incentive Plan (the "Plan"); and
WHEREAS, this RESTRICTED STOCK AGREEMENT (the "Agreement"), is made as
of the 25th day of May, 2006, between the Company and Xxxxx X. Xxxxx (the
"Employee"), and sets forth the terms of the Restricted Shares (as defined
below) issued to Employee pursuant to the Plan's terms; and
WHEREAS, the Compensation Committee of the Board of Directors (the
"Committee") has determined that it is in the best interests of the Company to
establish a qualifying performance-based vesting formula for the Restricted
Shares, subject to approval by the Company's stockholders, to qualify for an
exemption from the limits on deductibility of executive compensation under
Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code");
and
WHEREAS, at its meeting on February 23, 2006, the Committee approved
the material terms of the performance-based vesting for the Restricted Shares;
and
WHEREAS, all of the terms and provisions of the Plan are incorporated
herein by reference and made a part hereof, and all capitalized terms used but
not defined in this Agreement have the meanings set forth in the Plan.
NOW THEREFORE, in consideration of the mutual covenants hereinafter set
forth, the parties hereto agree as follows:
1. Grant of Restricted Stock. The Company hereby grants to Employee, on
the terms and conditions hereinafter set forth, 100,000 shares of the
presently authorized but unissued Common Stock, $.01 par value per
share, of the Company (the "Restricted Stock").
2. Issue Date and Performance Vesting Terms.
A. The Issue Date of the Restricted Stock shall be May 25, 2006.
B. The Restricted Stock granted to Employee hereunder, subject to
the other terms and conditions set forth herein, shall become
vested over a period of four (4) fiscal years 25.0% per fiscal
year, provided that, with respect to each fiscal year the
performance goal for such period has been met. For the first
fiscal year (through December 31, 2006), the performance goal
shall be an increase in the Company's "adjusted pre-tax
income" of 10% or more for the 2006 fiscal year when compared
to the prior fiscal year. In each subsequent vesting year, the
performance goal for further vesting of the Restricted Stock
will be determined by the Committee and established no later
than ninety (90) days after the commencement of such fiscal
year. If, in any year, the performance goal is not met, the
Committee may establish a goal for a subsequent year which, if
achieved or exceeded, may result in full or partial vesting of
the shares that did not otherwise become vested in a prior
year. Performance goals will in all events be based upon the
Company's "adjusted pre-tax income."
C. Vesting of the Restricted Stock for a given year shall only
occur following certification by the Committee of the
achievement of the related performance goal. Future years'
performance goals shall be set forth in Addenda to this
Agreement, signed by the Company and the Employee. For
purposes of this Agreement, "adjusted pre-tax income" is
determined based on the Company's audited financial statements
as the Company's income before income tax, increased by (i)
the expense incurred for the year for the Performance-Based
Annual Incentive Awards to the chief executive officer and
chief investment officer, (ii) the expense incurred for the
year for Performance-Based Restricted Stock Awards to the
chief executive officer and chief investment officer and (iii)
the expense incurred for the year for incentive compensation
for all of the Company's other employees.
D. Upon the death of the Employee, all of the Restricted Stock
shall become 100% vested, effective upon the date of death.
Upon termination of employment of Employee (for any reason
other than death), any shares of Restricted Stock that have
not vested shall be forfeited to the Company without
consideration; provided, however, that Employee's Employment
Agreement may provide other terms applicable to the vesting of
such unvested shares of Restricted Stock in the event of the
termination of Employee's employment.
3. Employment of Employee. As an inducement to the Company to issue the
Restricted Stock to Employee, and as a condition thereto, Employee
acknowledges and agrees that, without limitation of his rights under
any employment agreement with the Company, neither the issuance of the
Restricted Stock to Employee nor any provision contained herein shall
entitle Employee to remain in the employment of the Company or its
affiliates or affect the right of the Company to terminate Employee's
employment at any time.
4. Restrictions on Transfer.
A. Under no circumstances shall any sale or other transfer of any
shares of Restricted Stock be valid unless and until the
shares proposed to be sold or transferred are fully vested.
B. The spouse of Employee shall execute a signature page to this
Agreement as of the date hereof and agree to be bound in all
respects by the terms hereof to the same extent as Employee.
The spouse further agrees that should she predecease Employee
or become divorced from Employee, any of the shares of
Restricted Stock which such spouse may own or in which she may
have an interest shall remain subject to this Agreement.
5. Notices; Deliveries. Any notice or delivery required to be given under
the terms of this Agreement shall be addressed to the Company at its
principal office, and any notice or delivery to be given to Employee
shall be addressed to him at the address given by him and appearing in
the Company's records or such other address as either party hereto may
hereafter designate in writing to the other. Any such notice or
delivery shall be deemed to have been duly given when addressed as
aforesaid, registered or certified mail, and deposited (postage or
registration or certification fee prepaid) in a post office or branch
post office regularly maintained by the United States.
6. Disputes. As a condition of the granting of the Restricted Stock
hereby, Employee and his heirs and successors agree that any dispute or
disagreement which may arise hereunder shall be determined by the
Company's Board of Directors in its sole discretion and judgment, and
that any such determination and any interpretation by the Board of
Directors of the terms of this grant of Restricted Stock shall be final
and shall be binding and conclusive, for all purposes, upon the
Company, Employee, his heirs and personal representatives.
7. Certificates.
A. The certificate(s) representing the shares of Restricted Stock
granted hereby will be stamped or otherwise imprinted with the
legend required by the Plan with respect to any applicable
restrictions on the sale or transfer of such shares, and the
stock transfer records of the Company will reflect stop
transfer instructions with respect to such shares.
B. At the election of the Company, the Company may retain the
certificate(s) representing the shares of Restricted Stock
granted to Employee pursuant to this Agreement until such time
as the vesting restrictions set forth in Section 2 have lapsed
and the restrictions on the transfer of such Restricted Stock
set forth in Section 4 have terminated or are removed by the
Board of Directors. Within a reasonable time thereafter, the
Company will deliver to Employee a new certificate
representing such shares, free of the legend referred to in
paragraph A above. The issuance of such certificate shall not
affect any restrictions upon the transferability of such
shares pursuant to applicable law or otherwise.
C. If the Company elects to issue the certificate(s) representing
the shares of Restricted Stock granted hereunder prior to the
termination or lapse of the restrictions on vesting and
transfer, the legend referred to in paragraph A above shall
remain on such certificate(s) until such time as the vesting
and transfer restrictions have terminated or lapsed or are
removed by the Board of Directors.
8. Restricted Stock Subject to Plan. The Restricted Stock granted hereby
is subject to the Plan. If a conflict exists between any term or
provision contained herein and a term or provision of the Plan, the
applicable terms and provisions of the Plan will govern and prevail.
9. Miscellaneous.
A. Employee hereby agrees that (i) Employee is acquiring the
Restricted Stock for investment purposes and not with a view
to the resale or distribution thereof; (ii) the Company may
withhold from Employee any payment or consideration to be paid
to Employee by the Company, any tax which the Company believes
is required to be withheld with respect to any benefit under
the Plan or this Restricted Stock Agreement, and to hold as
security for the amount to be withheld any property otherwise
distributable to Employee under the Plan until the amounts
required to be withheld have been so withheld; and (iii)
Employee will make appropriate arrangements with the Company
for satisfaction of any applicable federal, state or local
income tax, withholding requirements or like requirements.
B. If any party to this Agreement so required under this
Agreement fails or refuses to comply with the provisions of
this Agreement, then in addition to any other remedies
provided by law or this Agreement, the party affected thereby
may institute and maintain a proceeding to compel the specific
performance of this Agreement by the party so defaulting.
C. Within 30 days after the date of this Agreement, Employee may
make an election with the Internal Revenue Service under
Section 83(b) of the Internal Revenue Code and the regulations
promulgated thereunder.
D. This Agreement shall be binding upon and inure to the benefit
of any successor or successors of the Company.
E. The interpretation, performance and enforcement of this
Agreement shall be governed by the laws of the State of Texas.
F. This Agreement may be executed in multiple counterparts, each
of which shall be deemed an original, but all of which
collectively shall constitute a single instrument.
G. If any one or more of the provisions or parts of a provision
contained in this Agreement shall for any reason be held to be
invalid, illegal or unenforceable in any respect in any
jurisdiction, such invalidity, illegality or unenforceability
shall not affect any other provision or part of a provision of
this Agreement or any other jurisdiction, but this Agreement
shall be reformed and construed in any such jurisdiction as if
such invalid or illegal or unenforceable provision or part of
a provision had never been contained herein and such provision
or part shall be reformed so that it would be valid, legal and
enforceable to the maximum extent permitted in such
jurisdiction.
IN WITNESS WHEREOF, the Company has, as of the date and place first
above written, caused this Agreement to be executed on its behalf by its
authorized officer and Employee has hereunto set his hand as of the date and
place first above written.
WESTWOOD HOLDINGS GROUP, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxx, Xx.
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Name: Xxxxxxx X. Xxxxxxxxxx, Xx.
Its: Chief Financial Officer
EMPLOYEE SIGNATURE PAGE
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TO RESTRICTED STOCK AGREEMENT
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Employee Name: XXXXX X. XXXXX
Signature /s/ Xxxxx X. Xxxxx
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I, the undersigned, being the spouse of the above-named Employee,
hereby acknowledge that I have read and understand the foregoing Restricted
Stock Agreement under the Third Amended and Restated Westwood Holdings Group,
Inc. Stock Incentive Plan, and I agree to be bound by the terms thereof.
Spouse Name: XXXXXXXX XXXXX
Signature /s/ Xxxxxxxx Xxxxx
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