Reference: SAR 98-1
EXHIBIT 10.17
STOCK APPRECIATION RIGHT AGREEMENT
GRANTED TO: Xxxxx Xxxxxxxx
DATE OF GRANT: January 2, 1998
GRANTED PURSUANT TO: Heartland Technology, Inc. 1997 Incentive and Capital
Accumulation Plan
NUMBER OF UNDERLYING 25,000 shares
SHARES OF COMMON
STOCK:
EXERCISE PRICE: $16.625 per share
VESTING SCHEDULE: 100% at May 30, 1998
1. This Stock Appreciation Right Agreement (the "Agreement") is made
and entered into as of January 2, 1998, between Heartland Technology, Inc., a
Delaware corporation (the "Company"), and Xxxxx Xxxxxxxx ("Employee").
2. Employee is granted a stock appreciation right by the Compensation
Committee of the Company's Board of Directors (the "Committee") relating to
25,000 shares of Common Stock (the "Right") pursuant to the Company's 1997
Incentive and Capital Accumulation Plan (the "Plan"). Capitalized terms not
defined herein shall have the meanings ascribed thereto in the Plan. The Right
granted hereunder is a matter of separate inducement and is not in lieu of
salary or other compensation for Employee's services.
3. The Right's exercise price is $16.625 per share, such exercise price
being in the judgment of the Committee not less than one hundred percent (100%)
of the Fair Market Value of a share of Common Stock on the date of grant.
4. Subject to the terms of the Plan and this Agreement, the Right
entitles Employee to receive from the Company an amount in cash equal to the
product of (X) the amount, if any, by which the Fair Market Value of a share of
Common Stock on the date of exercise exceeds the exercise price per share
specified in Paragraph 3 hereof and (Y) the number of shares with respect to
which such Right shall have been exercised.
5. Subject to Paragraphs 6, 7 and 8 below, the Right shall become fully
exercisable on May 30, 1998 (the "Vesting Date").
6. Subject to Paragraphs 7 and 8 below, the unexercised portion of the
Right, unless sooner terminated, shall expire on January 2, 2008 (the
"Expiration Date") and, notwithstanding anything contained herein to the
contrary, no portion of the Right may be exercised after such date.
7. If prior to the Expiration Date, Employee's employment with the
Company or any subsidiary corporation terminates, the Right will terminate on
the applicable date as described below, provided, however, that none of the
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events described below shall extend the period of exercisability beyond the
Expiration Date:
(a) If the employment of Employee is terminated by reason of
Employee's death while in the employ of the Company or any subsidiary
corporation, the Right shall immediately become fully exercisable and remain
exercisable for twelve (12) months after Employee's death and shall be
exercisable by the executor or administrator of the estate of the deceased
Employee or the person or persons to whom the deceased Employee's rights under
the Right shall pass by will or the laws of descent or distribution;
(b) If the employment of Employee is terminated by the Company or
any subsidiary corporation for reason of Employee's "permanent disability" (as
defined below), the Right shall immediately become fully exercisable on the date
of such termination and shall remain exercisable for six (6) months after such
date; provided, however, that if Employee dies during the six month period
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following such date and Employee has not exercised the Right, the Right shall
remain exercisable for an additional twelve (12) months after Employee's death
and shall be exercisable by the executor or administrator of the estate of the
deceased Employee or the person or persons to whom the deceased Employee's
rights under the Right shall pass by will or the laws of descent or
distribution;
(c) If the employment of Employee is terminated by the Company or
any subsidiary corporation for "Cause" (as defined below), the Right shall, to
the extent not theretofore exercised, immediately become null and void on the
date of such termination;
(d) If the employment of Employee is terminated (i) by the Company
or any subsidiary corporation other than (X) for "Cause" or (Y) for reason of
Employee's death or "permanent disability" or (ii) by the Employee for "Good
Reason" (as defined below), the Right to the extent not theretofore exercised
shall immediately become fully exercisable on the date of such termination and
shall remain exercisable for six (6) months after such date;
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(e) If the employment of Employee is terminated by the Employee
prior to the Vesting Date for other than "Good Reason", the Right shall, to the
extent not theretofore exercised, immediately become null and void on the date
of such termination; or
(f) If the employment of Employee is terminated by the Employee on
or after the Vesting Date, the Right shall remain exercisable for six (6) months
after the date of such termination.
For purposes of this Agreement, the terms "permanent disability",
"Cause" and "Good Reason" shall have the meanings ascribed to such terms in the
Employee's employment agreement with the Company (f/k/a Milwaukee Land Company),
dated June 29, 1993, as amended from time to time (the "Employment Agreement"),
or any successor agreement.
8. Upon the occurrence of a "Change in Control" (as defined below), the
Right shall immediately become fully exercisable and shall terminate thirty (30)
days after the occurrence of the Change in Control. Upon such termination,
Employee shall receive, with respect to the unexercised portion of the Right, an
amount in cash equal to the product of (X) the amount, if any, by which the Fair
Market Value of a share of Common Stock immediately prior to the occurrence of
such Change in Control exceeds the exercise price per share specified in
Paragraph 3 hereof and (Y) the number of shares with respect to which such Right
had not been theretofore exercised on the date of such termination. For purposes
of this Agreement, the term "Change in Control" shall have the meaning ascribed
to such term in the Plan.
9. Employee may exercise the Right regardless of whether any other
Stock Appreciation Right that Employee has been granted by the Company remains
unexercised. In no event may Employee exercise the Right for a fraction of a
share or for less than 100 shares unless such number is the remaining balance
for which the Right is then exercisable.
10. The Company may withhold from sums due or to become due to Employee
from the Company an amount necessary to satisfy its obligation to withhold taxes
incurred by reason of the exercise of the Right, or may require Employee to
reimburse the Company in such amount.
11. Employee shall not have any of the rights of a shareholder with
respect to the shares of Common Stock underlying the Right.
12. Any exercise of this Right shall be in writing addressed to the
Corporate Secretary of the Company at the principal place of business of the
Company, specifying the number of Rights being exercised and the exercise price
of such Rights.
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13. This Right shall not be transferable otherwise than by will or the
laws of descent and distribution, and shall be exercisable, during Employee's
lifetime, only by Employee. Notwithstanding the foregoing, this Right may be
transferred by Employee solely to Employee's spouse, siblings, parents, children
and grandchildren or trusts for the benefit of such persons, subject to any
restriction included in this Agreement.
14. This Agreement is subject to all terms, conditions, limitations and
restrictions contained in the Plan, which shall be controlling in the event of
any conflicting or inconsistent provisions.
15. This Agreement is not a contract of employment and the terms of
Employee's employment shall not be affected hereby or by any agreement referred
to herein except to the extent specifically so provided herein or therein.
Nothing herein shall be construed to impose any obligation on the Company to
continue Employee's employment, and it shall not impose any obligation on
Employee's part to remain in the employ of the Company.
16. Employee acknowledges and agrees that neither the Company, its
shareholders nor its directors and officers, has any duty or obligation to
disclose to the Employee any material information regarding the business of the
Company or affecting the value of the Common Stock before or at the time of a
termination of the employment of Employee by the Company, including, without
limitation, any information concerning plans for the Company to make a public
offering of its securities or to be acquired by or merged with or into another
firm or entity.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first written above.
HEARTLAND TECHNOLOGY, INC.
By: /s/ Xxxx X. Xxxxxxxxxx
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Name: Xxxx X. Xxxxxxxxxx
Title: Vice President - Finance
ACCEPTED:
/s/ Xxxxx Xxxxxxxx
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Xxxxx Xxxxxxxx
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